Ad spending picture improves in 2010, but no growth yet; direct fares better

Worldwide investment in advertising is expected to improve in 2010, but growth is not expected yet, according to media buying giant GroupM. Direct marketing, along with digital media investment, both fare better than traditional media in the agency’s outlook.

“We predict not growth in 2010, but a further small fall of 1.4% to follow the 5.5% contraction we expect in 2009,” said Adam Smith, futures director at GroupM.

“Some sort of recovery [in advertising spending] is at hand,” Smith added, characterizing this latest forecast as good news.

Marketing services continues to garner a great share of ad dollars, Smith said. The sector is “still removing from media advertising about half a point of all marketing investment every year,” he explained.

However, it is not recession-proof.

“Direct marketing’s superior accountability notwithstanding, direct marketing has suffered like all marketing from the vacuum of advertiser and general demand, and this is a defining characteristic of this recession,” Smith told DMNews.

Digital media, driven by paid search and video advertising, will also gain a greater share of the global ad market in the next two years, according to the report, accounting for 15% of global ad spending, up from 10% in 2007.

The North American advertising picture is worse than the global landscape. Smith predicts an ad spending decline of 4.2% in 2009, and a bigger drop — 6.1% — in 2010.

GroupM forecasts spending globally, with drill-down by country and by media channel.

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