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GroupM shrinks 2011 forecast to 4.8% growth

Global ad spending will grow by 4.8% in 2011 to $505.8 billion, online media company GroupM said July 6. The company shaved 1% off its December prediction of 5.8% growth because of the Japanese disasters and unrest in the Middle East.

“It’s highly unusual for natural disasters to measurably impact the totality of global advertising,” Adam Smith, futures director at GroupM, said in a statement. “However, the earthquake and subsequent tsunami in Japan was of this rare scale.”  

GroupM has also revised its digital ad-spending forecast in the company’s “This Year, Next Year” report. The medium —specified in the report as measurable digital advertising, which GroupM categorized as “interaction”—is now expected to account for 17% of global advertising in 2011, up 1% from the company’s prediction last year.

Total US ad spending in 2011 will grow 3.8% versus last year, reaching $148 billion, according to the report. The bulk of domestic ad budgets this year will go to TV, which is expected to reap $63 billion and hold a 42.6% share. Digital follows with $32.2 billion and a 21.8% share.

US newspaper ad spending is projected to drop 7% to $15.7 billion. But declines are expected to slow, with a 4% dip to $15.1 billion forecast for 2012.

The 2012 US election cycle and the Olympics will fuel $540.3 billion in global ad spending next year, the report said, a 6.8% improvement versus GroupM’s 2011 forecast. Those events are expected to push US ad spending next year to $154.1 billion.

“Without the election, US ad growth in 2012 would probably be slower than what we are predicting for 2011,” GroupM chief investment officer Rino Scanzoni said in a statement. “The elections make heavy use of local TV and radio, so national media may well find 2012 is slower-going in any case. As for the Summer Olympics, the broadcasts will attract substantial advertising investment, but the majority of this will be displaced rather than new funds.”

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