• by Joe Mandese  @mp_joemandese, July 10, 2006

Italy may have won the World Cup, but Madison Avenue is winning the economic game. In a new quarterly update to its global and U.S. ad tracking report, ZenithOptimedia has once again revised its outlook up, thanks in part to stronger-than-expected advertising stimulus from the global soccer tournament, as well as the continuing strength of online ad spending. Both factors, as well as the fact that advertisers have not lost confidence in some key traditional media such as television, are helping to keep the advertising spending on track with overall economic growth.

In its latest revision, ZenithOptimedia now expects worldwide ad spending to rise 6.1 percent in 2006, up a tenth of a point from the 6.0 percent prediction it made in April, which was up from a 5.9 percent estimate by the agency in December 2005.

U.S. ad spending is now projected to rise 5.4 percent in 2006, up from ZenithOptimedia's projections of 5.2 percent in April and 5.1 percent in December 2005.

ZenithOptimedia's more buoyant outlook comes weeks after rivals Universal McCann and Aegis Group revised their outlooks downward, and after a leading U.S. ad tracker, TNS Media Intelligence forewarned that U.S. ad growth may be lagging overall economic growth (MDN June 15).

That does not appear to be the case, according to ZenithOptimedia, which noted, "Like the ad market, the global economy is also growing slightly above trend, so advertising's contribution to total GDP is stable. This suggests that the current regime of steady ad spend growth will be sustainable for several years to come."

ZenithOptimedia was especially bullish on the contribution of the World Cup to the global ad economy, something both Aegis Group and securities firm Merrill Lynch have previously said was not materializing as a significant economic factor for the add industry.

"The World Cup is contributing to this year's strong growth globally, but not in some markets," the agency noted, adding, "This is only to be expected in markets like the U.S., where [soccer] remains very much a minority sport, though its popularity has grown in recent years."

Ironically, ZenithOptimedia said the World Cup had "surprisingly little effect" on the advertising economy of its host nation Germany, though it had a significant impact in other markets, especially in Belgium, France and the Netherlands. "This is the first World Cup to be shown on commercial television in north Belgium, creating new opportunities for advertisers there. In Asia, the extra advertising stimulated by the competition has been particularly notable in Malaysia and South Korea," the agency said.

Among the major media, the Internet continues to be the most significant contributor to worldwide advertising growth. In fact, ZenithOptimedia now predicts online ad spending will surpass an also buoyant outdoor advertising marketplace in 2006, a year earlier than projected in its last report in April.

"The internet is growing far faster than any other medium, thanks to rapid innovation in the types of internet advertising, and in ways of measuring it and tracking consumers' responses to it," the agency said, adding, "We forecast Internet ad expenditure will grow 76 percent between 2005 and 2008, while the other media grow by between 10 percent (for radio) and 27 percent (for cinema). The pace of development has caused us to upgrade our forecasts yet again. We now forecast the Internet to account for 7.0 percent of worldwide ad expenditure by 2008, up from our 6.5 percent forecast in April and 6.0 percent in December; it accounted for 4.7 percent in 2005."