Commentary

Olympics, Online Video and Local Search To Drive Global Ad Spending

Olympics, Online Video and Local Search To Drive Global Ad Spending

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According to a study recently released by ZenithOptimemedia, the Olympic Games will help lift television's share of the global ad market to a record 38.2% in 2008. The study predicts that Online video and local search will drive 30% growth in internet ad expenditure this year, nine times faster than the rest of the ad market, and after credit squeeze and continued slump in the US housing market, the US is expected to increase only 2.5% in global ad spending, down from 3.3%

Global Advertising Expenditure By Medium (US$ million)

 

2005

2006

2007

2008

2009

Newspapers

118,803

123,547

124,880

128,410

132,118

Magazines

52,576

54,471

56,133

58,310

60,922

Television

151,143

161,714

169,903

182,370

192,165

Radio

34,160

35,191

36,305

37,542

39,221

Cinema

1,723

1,799

1,909

2,097

2,332

Outdoor

21,790

23,773

25,551

27,495

29,660

Internet

19,235

25,952

33,723

41,638

48,139

Total *

399,431

426,447

448,403

477,863

504,557

Source: ZenithOptimedia, October 2007

*Note: The totals shown are lower here than the totals in the ‘Advertising expenditure by region' table below, since that table includes total adspend figures for a few countries for which spend is not itemized by medium. This table also excludes some advertising that does not fit into the above media categories.

Share of total adspend by medium ( % 2005-2009)

 

2005

2006

2007

2008

2009

Newspapers

29.7

29.0

27.8

26.9

26.2

Magazines

13.2

12.8

12.5

12.2

12.1

Television

37.8

37.9

37.9

38.2

38.1

Radio

8.6

8.3

8.1

7.9

7.8

Cinema

0.4

0.4

0.4

0.4

0.5

Outdoor

5.5

5.6

5.7

5.8

5.9

Internet

4.8

6.1

7.5

8.7

9.5

Source: ZenithOptimedia, October 2007

Television faces many challenges, says the report: - the spread of DVRs; migration of viewers from premium mass-audience channels to cheaper specialist channels; and competition from the internet, to name three of the biggest. Despite all these, television will increase its share of global ad expenditure from 37.9% in 2007 to 38.2% in 2008, an all-time record.

Television is losing market share in in North America and Western Europe. However, the faster growth of ad markets in the rest of the world is counteracting this trend, as television tends to attract a much higher share of ad expenditure, because they are more dependent on FMCG advertisers, and their inhabitants have less media choice. The study expects the coverage of the Olympics in Beijing to give an extra boost to television in 2008, particularly in China and its neighbors.

The report now forecasts Internet advertising to grow 29.9%% this year (up from 28.6% three months ago). Online video and local search are the new, fast-growing segments.

Newspapers, says the report, are suffering the most from the depredations of the internet, which is better at delivering timely news and is an efficient substitute for newspaper classifieds.

Newspapers' share of world ad expenditure is expected to fall from 29.0% in 2006 to 26.2% in 2009, while outdoor is forecast to increase its market share over the same period, with new digital displays that make it easy for advertisers to book and distribute eye-catching ads at short notice.

Advertising expenditure(major media-newspapers, magazines, television, radio, cinema, outdoor, internet. US$ million at current prices)

 

2005

2006

2007

2008

2009

North America

173,306

182,542

187,423

195,216

201,341

Western Europe

99,204

104,180

108,540

113,415

118,417

Asia Pacific

84,534

89,708

95,373

104,064

110,331

Central & Eastern Europe

20,173

23,814

28,181

33,152

39,013

Latin America

18,488

20,738

22,035

23,531

24,984

Africa/M. East/ROW

10,835

13,545

15,880

18,905

22,507

World

406,539

434,528

457,432

488,283

516,593

Source: ZenithOptimedia, October 2007

 

Major Media Year-To-Year Change (% change)

 

2005 vs 04

2006 vs 05

2007 vs 06

2008 vs 07

2009 vs 08

North America

 3.0

5.3

2.7

4.2

3.1

of which USA

 2.9

5.2

2.5

4.1

3.0

Western Europe

3.8

5.0

4.2

4.5

 4.4

Asia Pacific

5.9

6.1

6.3

9.1

 6.0

Central & Eastern Europe

4.5

18.1

18.3

17.6

 17.7

Latin America

19.2

12.2

6.3

6.8

6.2

Africa/M. East/ROW

16.4

25.0

17.2

19.0

19.1

World

4.8

6.9

5.3

6.7

5.8

Source: ZenithOptimedia, October 2007

The continued slump in the US housing market has led to a sharp drop in property and construction advertising, particularly property classifieds in newspapers. This, and the recent credit squeeze, finds the study downgrading the forecast for growth in the US this year from 3.3% to 2.5%.

The report shows Western Europe, Asia Pacific and Latin America this year as largely unchanged, though the study forecasts Central & Eastern Europe to grow 18.3% this year (up from 16.9% three months ago) and Africa/Middle East/Rest of World to grow 17.2% (up from 15.6%).

The Ten Fastest Growing Ad Markets

 

% Growth 2009 v 2006

Serbia

308.8

Qatar

214.7

Kazakhstan

164.1

Egypt

117.7

UAE

108.9

Russia

108.3

Ukraine

100.5

Moldova

97.1

Belarus

96.8

Romania

93.0

Source: ZenithOptimedia, October 2007

For more information from ZeinithOptimedia, please visit here.

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