ZenithOptimedia ups global ad spending forecast
Global advertising spending continues to improve, even among print media, but television and the Internet are still leading the industry out of the recession, according to a revised forecast from ZenithOptimedia.
The media agency projects ad spending worldwide will grow 4.8% in 2010, with television and Internet advertising leading growth in all regions. Although the forecast is better than the 3.5% spending increase ZenithOptimedia forecast in July, growth will moderate in 2011, according to the firm. It predicts 4.6% growth next year, only slightly better than its previous 4.5% estimate.
The reason for the improvement is the contrast between 2010's spending and 2009's spending decreases, when advertisers pulled back as a result of the recession, said Anne Austin, senior publications executive at ZenithOptimedia. Global ad spending was down 10.6% worldwide and 12.9% in the US during 2009, according to the report.
“It does seem as if there has been a pattern of 2010 picking up faster than we expected across many markets,” said Austin. “The apparently not-so-impressive increase for 2011 over 2010 is more of an artifact of there being such a good recovery in 2010, rather than suggesting a poor 2011.”
US ad spending is expected to pick up momentum next year, rising from 2.2% growth this year to 2.4% in 2011 and 2.9% in 2012. Increasing confidence in the economy is an important factor, Austin said, noting the US tends to get a boost in “quadrennial” years such as 2012, which include the Summer Olympic Games and the presidential election campaign.
Some traditional direct media are also expected to post growth in the US. ZenithOptimedia predicts direct mail spending will be up 1.7% in 2010 and 2.9% in 2011, while telemarketing will rise 3% in 2010 and 2% in 2011. Marketers are returning to direct mail as the recession loses steam, and some advertisers who rely on it, such as banks and brokerages, are mailing more, according to the report. On the other hand, telemarketing will benefit from government cutbacks that will force more organizations to turn to this method for fundraising.
ZenithOptimedia doubled its US ad spending growth forecast to 2.2% in July, thanks to the return of many large advertisers to the marketplace. ZenithOptimedia's report notes that the US economy remains tentative, but financial, retail and auto advertisers are spending again. Those factors are helping television post growth in all segments, with network up 5%, cable increasing 8%, spot jumping 10%, and syndication up 1%.
Nearly all US media sectors will see growth this year, including consumer magazines, which are now expected to gain 2%, as opposed to a previous forecast of a 1% drop. Newspapers are still expected to be down 10%.
Internet advertising will also continue to show sharp increases globally, growing 13.5% this year, and accelerating to 14.9% in 2011 and 15.5% in 2012. It is expected to increase its share of ad worldwide spending to 16.5% by 2012, nearly catching up to newspapers, which continue to lose share.