ZenithOptimedia: U.S. Ad Forecast Up, Internet And Cable TV Rising

For the second time in less than four months, Publicis Groupe’s ZenithOptimedia has downgraded its global ad spending estimate for 2012. The latest full-year projection: close to $502 billion worldwide, up 3.8%. That’s down from its June growth forecast of 4.3%.

On a positive note, the shop upgraded its forecast for U.S. spending to nearly $161 billion, an increase of 4.3%. In June it pegged U.S. growth at just 3.6%.

ZO cited further spending cuts in the Euro Zone in response to continuing economic weakness there as the reason for the latest global spending downgrade. “Advertisers are broadly continuing to invest, despite the global economic concerns and issues,” stated Steve King, ZO’s global CEO. But King stressed that “strong return on investment” continues to be top of mind.

King noted that the U.S. “continues to deliver solid growth” that when combined with growth in developing markets, partially offsets Euro Zone spending declines. Spending in that region is expected to shrink more than 3% this year, per ZO estimates.

ZO North American CEO Tim Jones will present the latest forecast in detail during an Oct. 1 Advertising Week session in New York.

Looking ahead, ZO believes the global spending growth picture will brighten in both 2013 and 2014 with expenditure gains of 4.6% and 5.2%, respectively. The comparable figures for the U.S. are 3.6% and 4.4%.

Worldwide growth in the next two years will be led by countries with developing economies and by digital media spending. “We expect sustained and strong growth in Asia Pacific and Latin America, rapid recovery in Central and Eastern Europe, slower by substantial growth in North America and slow improvement in Western Europe,” the latest forecast states.

The Internet will remain the fastest-growing medium, growing globally by an average 15% a year between 2011 and 2014 to nearly $117 billion, per ZO. This year, Internet spending will surpass $88 billion. The Internet’s share of the ad market will climb from 16% in 2011 to more than 21% in 2014.

In the U.S., network TV is expected to post a 1% spending gain this year to $17.2 billion after posting a 2% decline last year. Per ZO’s forecast, the picture doesn’t get any rosier in the next two years, with spending on the medium projected to drop 1% in both 2013 and 2014.

By comparison, national cable and spot TV will both be up sharply this year, with spot rising 12% to nearly $23 billion and cable climbing 8% to nearly $20 billion. National cable spending will grow 7% in each of the next two years, while spot will increase 3% next year and 4% in 2014.

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