• by Jack Loechner , Staff Writer, April 20, 2011

As a follow on after yesterday's Research Brief of where we've been, here's a look at where we might be we're going.

According to an adjusted ZenithOptimedia forecast for global ad expenditure, it is now forecast to grow by 4.2% in 2011, down from the 4.6% forecast in December as a result of the political turmoil in the Middle East and the devastating earthquake in Japan. In Egypt there was almost no advertising on television during the revolution, notes the report, and Japan broadcasters replaced almost all commercial ad slots with public-service announcements for weeks after the earthquake.

The report says that some of the missing advertising is expected to reappear later in the year, followed by strong growth in these markets in 2012. Japan is forecast to shrink 4.1% this year then grow 4.6% next year, while Egypt follows this year's 20.0% drop with 12.1% recovery in 2012.

Overall, the report shows a 5.8% growth in global ad expenditure in 2012, up from our prediction of 5.2% growth last December, partly the result of the rebound in Japan and the Middle East, and partly to further strengthening in Western and Central & Eastern Europe.

The growth rate in North America is expected to grow by an average of 3.1% a year between 2010 and 2013, and Western Europe to grow by 3.5%. Developing markets, defined as everywhere outside North America, Western Europe and Japan, will increase their share of the global ad market from 30.9% in 2010 to 35.1% in 2013.

There are now two ‘developing' markets in the world's top ten ad markets, and there will be three in 2013. China will overtake Germany to become the world's third-largest ad market in 2011, and stay at that position throughout the forecast period.

Top Ten Ad Markets (US$ million, current prices; Currency conversion at 2009 average rates)
2010		Adspend	2013		Adspend
1	USA	151,519	1	USA	165,903
2	Japan	43,297	2	Japan	44,173
3	Germany	24,535	3	China	33,999
4	China	23,208	4	Germany	26,361
5	UK	18,042	5	UK	19,970
6	France	13,181	6	Brazil	16,268
7	Brazil	12,950	7	Russia	14,751
8	Italy	10,801	8	France	14,362
9	Australia	9,705	9	Italy	11,738
10	Canada	8,891	10	Australia	11,167
Source: ZenithOptimedia

 

Major Media Advertising Expenditure By Region (newspapers, magazines, television, radio, cinema, outdoor, internet; US$ million, current prices; Currency conversion at 2009 average rates).
	2009	2010	2011	2012	2013
North America	156,556	160,556	164,768	170,475	176,118
Western Europe	100,327	105,392	109,094	113,116	116,926
World	428,421	451,943	470,829	498,062	525,587
Source: ZenithOptimedia

The report predicts that the internet will overtake newspapers to become the world's second-largest advertising medium in 2013. Newspaper ad expenditure was still 51% larger than internet ad expenditure in 2010, but newspaper expenditure is shrinking by 1.4% a year, as circulations continue to fall in developed markets, and readers migrate to the internet.

Meanwhile internet advertising continues to grow at a forecast average rate of 14.4% a year between 2010 and 2013. Newspaper ad expenditure is forecast to fall, while internet ad expenditure rises from to US$94.5 billion over the same period.

This year display advertising has taken over from search as the main driver of internet ad growth. Display, broadly defined to include online video and social media, has been invigorated by these fast-growing segments. Affordable, do-it-yourself tools to create streaming video ads have opened online video to small and local advertisers.

Television remains by far the largest medium and is continuing to increase its market share.

Advertising Expenditure By Medium (US$ million, current prices Currency conversion at 2009 average rate)
	2009	2010	2011	2012	2013
Newspapers	97,421	95,235	92,997	91,867	91,246
Magazines	43,856	43,768	43,246	43,007	42,835
Television	165,502	180,315	190,169	203,698	215,980
Radio	31,672	31,995	32,828	34,077	35,243
Cinema	2,091	2,308	2,451	2,606	2,764
Outdoor	28,184	29,456	31,172	33,306	34,946
Internet	54,230	63,049	71,623	82,358	94,467
Total *	422,956	446,126	464,486	490,920	517,481
Source: ZenithOptimedia

 

Share Of Total Adspend By Medium (% of Total by Year)
	2009	2010	2011	2012	2013
Newspapers	23.0	21.3	20.0	18.7	17.6
Magazines	10.4	9.8	9.3	8.8	8.3
Television	39.1	40.4	40.9	41.5	41.7
Radio	7.5	7.2	7.1	6.9	6.8
Cinema	0.5	0.5	0.5	0.5	0.5
Outdoor	6.7	6.6	6.7	6.8	6.8
Internet	12.8	14.1	15.4	16.8	18.3
Source: ZenithOptimedia

  

Internet Advertising By Type (US$ million, current prices Currency conversion at 2009 average rates)
	2009	2010	2011	2012	2013
Display	18,230	21,435	24,958	29,184	34,126
Classified	9,773	10,554	11,630	12,706	13,832
Paid search	26,227	31,059	35,035	40,468	46,509
Total	54,230	63,049	71,623	82,358	94,467
Source: ZenithOptimedia

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