4.1% growth forecast in global ad spend in 2013
Global ad expenditure will grow 4.1% in 2013, reaching £322 billion by the end of the year according to new data from ZenithOptimedia.
As has been the case since the economic downturn began in 2007, this growth will be led by developing markets, which is forecast to grow by 8% on average in 2013, while developed markets grow by just 2%, weighed down by the eurozone crisis.
Internet advertising is supplying most of the growth in expenditure by medium, driven by rapid development in social media and online video. ZenithOptimedia forecast internet advertising to grow by 14.6% in 2013, while traditional media grow by 1.7%.
“Advertisers are willing to increase their budgets wherever they can achieve a strong return on investment,” says Steve King, Global Chief Executive Officer for ZenithOptimedia Group. “This means that developing markets, social media and online video are all growing rapidly, supporting continued expansion in global ad expenditure despite stagnation in the eurozone.”
The advertising market has been slow to recover from its 9.6% decline in 2009 – the sharpest decline on record. This is mainly because the underlying economic recovery has been slow and erratic, as is normally the case when recessions are caused by financial crisis.
The main risks to growth in 2013 are the US fiscal cliff and the potential for further conflict in the Middle East. The general consensus among economic forecasters, however, is that the global economy will gradually build up speed over the next three years. The IMF predicts nominal GDP growth will rise from 5.6% in 2012 to 6.9% in 2015.
ZenithOptimedia predicts ad expenditure will rise in step with GDP over the next three years, although ad expenditure growth will remain behind GDP growth throughout our forecast period.
They do not expect ad expenditure to grow at or ahead of GDP until full confidence in the global economy is restored. In particular this will require a convincing, permanent solution to the eurozone crisis, the say.