• by Joe Mandese  @mp_joemandese, April 19, 2005

One of the world's biggest media buyers Monday revised its outlook for U.S. ad spending upward, especially for two of the newest media: online and cinema advertising. Both of those media are now expected to grow at much higher rates than the overall advertising economy through 2007, and much of their growth will come at the expense of traditional media, especially broadcast TV, Publicis' ZenithOptimedia Group predicted in its updated forecast.

The agency, which in recent years has tried hard to position itself alongside Interpublic's Universal McCann unit as a leading ad industry forecaster, said its improved outlook for online ad spending reflects its "enhancements as a marketing medium and higher overall confidence in online media in general."

As a result, ZenithOptimedia now projects online ad spending will rise 12 percent in 2006, up a percentage point from an earlier forecast of +11 percent. The agency said online should do even better in 2007, rising 15 percent over 2006, due largely to the medium's ability to "geo-target," which would "increase retail messaging online."

Meanwhile, consumer brands continue to flock online with general market advertisers allocating larger budgets to it "after having tested the medium in the past few years," the report said, adding that online also continues to benefit from increased direct response and brand advertising spending.

In fact, online is now estimated to account for 5.4 percent of all U.S. ad spending, making the U.S. the most concentrated online ad marketplace of any nation with the exception of Sweden, where it has a 7.7 percent ad market share.

Other non-traditional media, especially cinema advertising and new forms of out-of-home media, are expected to outpace overall ad spending through 2007, the agency said, predicting a relatively modest growth rate of 4.3 percent for the major media ad expenditures in 2005, a 0.1 percent improvement from its last forecast.