"ZenithOptimedia predicts that Internet ad spend will grow 28.2% in 2007, while the rest of the market grows 3.9%," the media agency said in the most recent revision of its ongoing quarterly ad spending report. "The rise of the Internet has been dramatic. It has taken only 11 years to overtake two long-established media: cinema (which it overtook in 1997) and outdoor (which it overtook this year), and by 2009 it will be larger than radio.
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That makes online the fifth largest advertising medium, and closing in on No. 4 with what ZenithOptimedia termed "plenty of potential growth" due to the still rapid expansion of its market penetration worldwide, which is driving advertising spending.
"Internet penetration is peaking at about 70% in the most mature markets, but is only 17% worldwide. Even in the developed markets, the Internet receives a much lower share of ad budgets than the amount of time consumers devote to it would suggest it warrants."
Zenith forecasts that online will take nearly 9% of global ad spending by 2009, but ultimately expects the medium to take "well over 10%," a share it already enjoys in three major markets: Norway, Sweden and the U.K.
By 2009 we expect it to do so in ten markets: Australia, Canada, Israel, Japan, Norway, South Korea, Sweden, Taiwan, the UK and USA)," the agency anticipates.
Within online ad spending, ZenithOptimedia noted that paid search already is the largest sector, and will account for nearly $14 billion in global ad spending in 2007. But display advertising, including broadband video, is among the fastest growing segments, and will generate $10.5 billion in advertising budgets. Online classified spending ranks third with a forecasted $6.2 billion for 2007, followed by about $721 million in "other" formats such as email and mobile media.
"Apart from the Internet, only cinema and outdoor are forecast to grow faster than the market to 2009," the agency predicted, citing relatively low rates of growth for newspapers and magazines, and even for TV and radio.
Annual Ad Spending Growth Rates For Major Media | |||||
2005 | 2006 | 2007 | 2008 | 2009 | |
U.S. | +2.9% | +5.2% | +4.1% | +4.1% | +3.5% |
North America* | +3.0% | +5.2% | +4.2% | +4.1% | +3.6% |
Western Europe | +3.7% | +3.5% | +3.8% | +4.1% | +4.3% |
Asia Pacific | +5.4% | +5.9% | +6.3% | +7.4% | +5.9% |
Central & Eastern Europe | +15.4% | +16.6% | +15.6% | +14.4% | +13.9% |
Latin America | +18.9% | +7.2% | +4.2% | +4.9% | +5.0% |
Africa/M. East/ROW | +15.8% | +22.8% | +10.7% | +11.8% | +10.9% |
Worldwide | +5.3% | +6.1% | +5.4% | +5.8% | +5.3% |