Commentary

Global Advertising Back To The Future

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.

1 comment about "Global Advertising Back To The Future".
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  1. Fj Rich from EPI, 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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