Commentary

Television Still The Big Bucks Leader In Ad Spend Thru 2013

Despite the stock market's double digit drop in the last quarter, ZenithOptimedia is projecting a 2.2% increase in advertising for 2011, up from the agency's 2.1% forecast in July. The report also forecasts a 3.5% increases in both 2012 and 2013.

advertisement

advertisement

The media agency sees cable TV growing 12% this year, while the broadcast networks decline 2% and syndication slips 4%, taking into account current economic conditions and its knowledge of its clients' plans for the upcoming season.
The report notes that woes on Wall Street often are not necessarily followed by an ad market decline. In 12 market crashes over the past 31 years. the agency said. "... half of the stock market crashes preceded an advertising downturn, but half did not." Most recently, says the report, "the sharp drop in the Dow in the U.S. after September 11 did not prevent the recovery of growth in 2002, though growth remained weak."

Top Ten Ad Markets (US$ Million, Current Prices; Currency Conversion At 2010 Average Rates)

2010

2013

Rank

Country

Adspend

Rank

Country

Adspend

1

USA

$151,665

1

USA

$165,977

2

Japan

46,153

2

Japan

47,630

3

China

26,122

3

China

38,854

4

Germany

23,791

4

Germany

25,429

5

UK

18,086

5

UK

19,656

6

Brazil

14,716

6

Brazil

17,587

7

France

12,564

7

France

13,465

8

Australia

11,246

8

Australia

12,313

9

Italy

10,296

9

Canada

12,098

10

Canada

10,041

10

Russia

11,413

Source: ZenithOptimedia, October 2011

The report expects that cable networks will continue to build momentum, largely because of the return of big-spending automotive and financial advertisers. The forecast calls for cable to grow:

  • 12.0% in 2011
  • 10.0% in 2012
  • 10.5% in 2013

The agency expects the spot marketplace to be extremely volatile in 2012 with the presidential election year cycle generating a billion dollars or so in political spending. Adding to the frenzy will be the Olympics in August, bringing new and returning business to the local markets. All considered the report expects spot to TV to turn in annual increases of:

  • 4.0% in 2011
  • 8.0% in 2012
  • 2.0% in 2013

Advertising Expenditure By Medium (US$ Million, Current PricesCurrency Conversion At 2010 Average Rates);  And Share Of Total Adspend

 

2009

2010

2011

2012

2013

Newspapers

96,973

23.0%

95,416

21.5%

92,802

20.2%

91,911

19.0%

91,334

17.9%

Magazines

43,633

10.5

43,741

9.8

43,224

9.4

43,060

8.9

42,909

8.4

Television

160,199

38.4

176,826

39.8

184,929

40.2

196,182

40.5

207,056

40.5

Radio

31,778

7.6

32,169

7.2

32,899

7.1

33,906

7.0

35,117

6.9

Cinema

2,107

0.5

2,315

0.5

2,423

0.5

2,564

0.5

2,718

0.5

Outdoor

27,774

6.7

29,917

6.7

31,503

6.8

33,357

6.9

35,122

6.9

Internet

54,683

13.1

64,026

14.4

72,531

15.8

83,457

17.2

96,392

18.9

Total *

417,147

 

444,410

 

460,311

 

484,436

 

510,648

 

Source: ZenithOptimedia, October 2011

Video ads are "... becoming the main form of brand advertising in the digital space," the report says, adding that the streaming video category will see two out of every five ad dollars coming from local advertisers. The agency projects:

  • 12.6% Internet ad revenue growth in 2011
  • 16.2% growth in 2012
  • 17.3% in 2013

Internet Advertising By Type (US$ Million, Current Prices Currency Conversion At 2010 Average Rates)

Ad Type

2009

2010

2011

2012

2013

Display

$18,349

$21,875

$25,282

$29,713

$35,218

Classified

9,911

10,950

11,990

13,078

14,246

Paid search

26,423

31,202

35,259

40,666

46,928

Total

54,683

64,026

72,531

83,457

96,392

Source: ZenithOptimedia, October 2011

The analysis has made a reduction to its forecast for global ad expenditure growth in 2011 to 3.6%, down 0.5 percentage points from the forecast made in July. The slowdown in economic recovery in the developed markets, coupled with rising fears of double-dip recession, have caused some advertisers to trim back budget increases planned for the end of 2011, but with no sign of the cancelled campaigns and sharp budget cuts that signaled the beginning of the last advertising downturn in 2008.
The report predicts global ad expenditure at 5.3% growth in 2012, and 5.5% in 2013. TV's share of total ad spent was 38.4% in 2010 and should grow to 39.8% in 2011 and settle at 40.5% by 2013.

In summary, this picture is consistent with a history of ad market growth after many previous stock market shocks, assuming the world economy does not deteriorate dramatically:

  • Global ad expenditure forecast to grow 3.6% in 2011 after a modest slowdown in expenditure growth towards the end of the year
  • Growth forecast for 2012 remains a reassuring 5.3%
  • Developing markets to increase their share of the global ad market from 31.0% in 2010 to 34.9% in 2013
  • Internet the fastest-growing medium between 2010 and 2013 (14.6% a year) Television to contribute most new ad dollars (46% of total)

For more from ZenithOptimedia, please visit here, or to access the PDF file, go here.

Next story loading loading..