ZO, GroupM Predict Ad Spend Hits $574B By 2015
Top forecasters said Monday they expect modest ad-spending growth over the next few years. Predictions were offered by ZenithOptimedia, GroupM and Magna Global at the UBS Global Media &
Communications Conference in New York Monday. (See separate story on Magna forecast).
Global ad spending will pick up a little steam in the future, according to Publicis Groupe’s ZenithOptimedia. Spending will climb from 4.1% growth in 2013 for a total of $518 billion to 5.6% growth in 2015, reaching $574 billion.
GroupM is also calling for moderate growth next year -- 4.5%. It cited continuing economic woes in Europe and a lack of blockbuster events that drive advertising, such as Olympics and U.S. elections.
With just a month to go in the current year, ZO now believes global spending growth in 2012 will be 3.3% to about $497 billion. That’s a downgrade from the forecast the agency put out just two months ago, the final months of this year have turned softer than expected. GroupM’s global 2012 estimate is a little higher -- up 3.5% -- while Magna is estimating growth this year of 3.8%.
In the U.S. Zenith is forecasting 4.3% growth for 2012 for total major media spending of $161 billion. Next year, the shop sees growth decelerating in the U.S. to 3.5%, with spending reaching nearly $166.5 billion. Growth rates in the following two years will climb to 4.4% and 4.7% respectively, per the forecast.
GroupM is somewhat more pessimistic about the U.S., estimating 3.5% growth for this year, but 2.7% for 2013. “While we are well past the worst of the economic downturn, economic growth remains slow,” ZO stated in the U.S. portion of its forecast. “We continue to see TV dollars moving from network to cable, and this trend will likely continue as the cable networks add quality programming to their lineup.”
Print will continue to lose share to digital media, ZO said, while noting that mobile devices are breathing some new life into the magazine category. Digital media once again showed the largest spending growth gains in 2012, with mobile soaring nearly 50%, social media rising 37% and online video climbing 29%. Paid search was up 15%.
Newspapers showed the biggest decline, with spending down 8%, while magazines were down 3%.
Globally, ZO noted that spending growth has been driven by developing markets since the economic downturn began in 2007 and that trend will continue in 2013. Developing markets are estimated to contribute 8% growth on average, while developed markets will grow by just 2%, dragged down by the current recession in the Eurozone.
As in the U.S., digital media are driving growth globally. “Advertisers are willing to increase their budgets wherever they can achieve a strong return on investment,” stated Steve King, ZO’s Global CEO. This means that developing markets, social media and online video are all growing rapidly, supporting continued expansion in global ad expenditure despite stagnation in the Eurozone.”
GroupM also indicated that digital spending would continue grow by double-digit percentages. “Digital ad growth remains strong, sustained and structural,” stated GroupM futures director Adam Smith, the company’s top forecaster.