Ad spending forecasts from ZenithOptimedia and Group M are calling for healthy growth in 2011, especially in digital advertising, despite the spotty economic recovery in the US.
ZenithOptimedia, which improved its prediction for 2010 global ad spending growth to 4.9% from 4.8% in October, predicted ad spending growth will slow slightly next year to 4.6% then grow to 5.2% in both 2012 and 2013. There are no economic indicators pointing to a strong upswing or downswing, so Zenith is predicting a mild ad spending recovery, said Jonathan Barnard, head of publications at ZenithOptimedia.
“Until advertisers are fully confident that the economic recovery will be sustained, we expect growth to remain below its long-term trend rate of 6%,” ZenithOptimedia said in the report.
Direct mail spending will grow 1.7% in 2010, according to ZenithOptimedia. It will also show 2.9% growth in 2011 and 2012, according to the firm. Telemarketing is expected to show modest increases of 2% in each of the next three years after being flat for the past decade, thanks to increased fundraising activity by charities seeking to make up for government cutbacks.
TV continues to hold the biggest share of advertising spending, according to the report, which forecasts TV ad spending worldwide will grow to $191.2 billion in 2011 from $180.3 billion this year. Global Internet advertising will grow to $70.5 billion in 2011 from $61.9 billion in 2010, thanks to the rise of Web-based video and social media. Display advertising will increase its share of online ads from 33.9% of Internet spending in 2010 to 35% in 2013.
US ad spending will grow 2.4% next year, followed by stronger growth of 2.8% in 2012 and 3.3% in 2013. Recovery has been slower in this recession, partly because this downturn was so severe, but also because marketers worry about budget deficits at home and possible economic crises in Western Europe, said Barnard.
ZenithOptimedia also predicted that magazine spending will shrink 3.4% in 2011 and newspaper spending will drop by 10%, a smaller decrease than in past years.
Meanwhile, Group M said it expects 5.8% global ad spending growth next year to nearly $502 billion. The firm predicts US ad spending will grow 3.7% next year to $147.7 billion, bolstered by TV and online media spending.
Group M predicts online ad spending will hit $82 billion next year, possibly overtaking newspaper advertising spending in 2012. Marketers’ worries about the economy are driving increased spending on online media, according to eMarketer’s revised forecast. The firm now projects 10.5% growth in US online ad spending in 2011 to $28.5 billion, as well as double-digit growth rates through 2014, when spending totals will hit $40.5 billion.