Global ad spend to increase 3.5%, propelled by online

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Advertising spending around the world is doing better than expected this year, but the real standouts are online, especially paid search, mobile and social media, according to a revised forecast for 2010.

TV advertising has held up well during the economic downturn, thanks to new technologies such as high-definition TV, which are helping to boost viewership, according to a report from ZenithOptimedia. The media agency is forecasting global advertising spend will rise 3.5% this year, up from the 2.2% it had expected before, thanks to stronger than expected media buys in North America and Western Europe during the first half of the year.

But it is the Internet that will show the biggest share growth this year and beyond, according to a revision made to the company's annual spending forecast. Online advertising spending will rise from $49.8 billion and 10.5% of global spending in 2008 to $82.7 billion and 17.1% in 2012.

Paid search is driving most of the growth in online advertising, but mobile advertising and social media marketing are moving up faster than any media segment. ZenithOptimedia projects that paid search will rise from its 2008 level of $23.8 billion to $43.5 billion by 2012, or 52.6% of all online spending, while new formats including mobile and social media will make up 32% of online spending by 2012.

In the US, ZenithOptimedia forecasts that mobile advertising spending will grow by 43.2% a year between 2009 and 2012 and social media by 30.2%, while all online spending will grow at a still-respectable 15.6%. The only other media forecast to increase its share of ad spending in the same time frame is TV. Newspapers, magazines and radio are all expected to lose share while movie and outdoor advertising will stay flat.

ZenithOptimedia now estimates North America ad spend will grow 1.3 % — 1.1 % in the US alone — better than the 1.5% drop it previously forecast. Strength in TV sales led by the Super Bowl, the Vancouver Olympics and increases between 6% and 10% rate during the network upfront sales season will more than offset declines in print and radio spending, according to the forecast.

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