Global Advertising Back To The Future

by Jack Loechner, Jul 25, 2011, 8:15 AM

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According to ZenithOptimedia, global ad expenditure will grow by 4.1% in 2011, just 0.1 percentage points below the prediction made in April. It will return to $471 billion (U.S), the level it reached in 2008 before the recession. The ad market continues to recover from the 2009 recession, but growth has dipped this year in response to economic pressures, natural disaster and political disruption. More robust growth is forecast to resume in 2012 and 2013.

Developing markets continue to expand far faster than developed markets. North America advertising is expected to grow by an average of 3.1% a year between 2010 and 2013, and Western Europe to grow by 3.4%. Japan is expected to grow just 0.9% a year, after a big drop in 2011 followed by the recovery of lost ground over the next two years.

Top Ten Ad Markets (US$ million, current prices)
Rank	2010 Adspend		Rank	2013 Adspend
1	USA	$151,665	1	USA	$165,469
2	Japan	46,153	2	Japan	47,392
3	China	26,122	3	China	39,127
4	Germany	23,791	4	Germany	25,505
5	UK	18,086	5	UK	19,954
6	Brazil	14,716	6	Brazil	18,237
7	France	12,564	7	France	13,604
8	Australia	11,414	8	Australia	13,134
9	Italy	10,296	9	Russia	12,756
10	Canada	9,891	10	Canada	11,450
Source: ZenithOptimedia, July 2011

The sheer size of the US, 3.3 times the next-largest market, means it will contribute the most new ad dollars to the global market over the next three years despite its slow growth. However, the next five largest contributors are all developing markets: China (which contributes almost as much as the US, US$13.0 billion), Russia, Brazil, Indonesia and India. Overall, developing markets will contribute 62% of new ad dollars over the next three years.

The Ten Largest Contributors To Global Adspend Growth (2013 v 2010)
Rank	Adspend growth (US$, MM)
1	USA	$13,804
2	China	13,005
3	Russia	6,068
4	Brazil	3,521
5	Indonesia	2,768
6	India	2,639
7	UK	1,868
8	South Africa	1,797
9	Australia	1,719
10	Germany	1,714
Source: ZenithOptimedia, July 2011

The internet continues to grow at the fastest rate of any medium, says the report, at an average of 14.2% a year between 2010 and 2013. Display is the fastest-growing segment, growing by 16.4% a year, driven mainly by online video and social media. Streaming video ads are growing quickly, thanks to the emergence of do-it-yourself tools that have allowed local advertisers to enter the market.

Internet Advertising By Type (US$ Million, Current Prices)
	2009	2010	2011	2012	2013
Display	$18,329	21,799	25,275	29,530	34,400
Classified	9,940	10,765	11,815	12,852	13,961
Paid search	26,431	31,126	35,086	40,436	46,606
Total	54,700	63,690	72,176	82,818	94,967
Source: ZenithOptimedia, July 2011

In most developed markets, social media sites are near the top of the list of most-popular websites, and they are often way ahead of their rivals in time spent by users. In the US, social media use has jumped 25% over the last year, and now accounts for 16% of all time spent online, and 34% of display impressions.

Advertising Expenditure By Medium (US$ Million, Current Prices)
	2009	2010	2011	2012	2013
Newspapers	$97,354	95,945	93,750	93,253	92,892
Magazines	43,776	43,810	43,201	43,094	42,992
Television	163,484	179,601	189,412	202,712	214,968
Radio	31,917	32,259	33,025	34,397	35,604
Cinema	2,099	2,310	2,440	2,593	2,746
Outdoor	27,830	29,926	31,721	34,042	35,689
Internet	54,700	63,690	72,176	82,818	94,967
Total	421,161	447,541	465,724	492,910	519,857
Source: ZenithOptimedia, July 2011

Concluding, the report suggests this snapshot of the study:

• Global ad expenditure forecast to reach US$471 billion this year, the same as the peak level of expenditure reached in 2008
• Expenditure predicted to grow 4.1% in 2011, essentially confirming the 4.2% growth predicted in April
• Small softening in the Americas and Europe counterbalanced by stronger spending in Asia Pacific
• Middle Eastern advertising continues to decline as political disruption spreads
• Internet is the fastest-growing medium (14.2% a year) between 2010 and 2013
• Television to contribute most new ad dollars (49% of total)

For the complete PDF report from ZenithOptimedia, please visit here.

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0 comments on "Global Advertising Back To The Future".

1. Fj Rich from EPI
   

   commented on: July 26, 2011 at 4:02 p.m.

   Good report but for the display $ numbers for print. It appears the report defines "newspapers" very narrowly because the conclusion that display advertising revenue from Internet is greater than print is incorrect ... by a significant margin. Clarity of terms would have helped to stem misinformation.

   That said, we all know how the Internet is growing, but it remains a high-use and low-revenue model to date. Despite the attention SM gets, it contributes less than 4% to ad revenue totals.

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