ZenithOptimedia has revised upwards it global advertising spending forecast for this year from 4.2% to 6.2% as worldwide advertising confidence holds despite oil and consumer uncertainties.
After Zenith’s cautious forecasts in April, the group returned to its crystal ball and has revised all global predictions upwards. The updated report says, by 2005 the global advertising expenditure growth target is now set at 6.2%, up from April’s prediction of 3.4%, while 2006 has been revised upwards from 3.8% to 5.6%.
By 2005, growth in European advertising expenditure is expected to overtake the US, however despite significant gains made by Europe, expectations for this continent continue to drag behind the worldwide average for the next few years.
This year, the advertising market in Europe is expected to grow by 4.7%, although tying with Latin America, it pales in comparison to North America which is forecast to rise by 6.0% and Asia Pacific with a predicted 7.3% increase. However, the clear winner in 2004 in terms of growth is Africa, the Middle East and the rest of the world, with a 13.4% year-on-year growth anticipated.
By 2005, growth is expected to slow down in all regions, except for Latin America but the good news for Europe is that it is predicted to outgrow the US next year in terms of advertising expenditure to reach a 4.4% increase, compared to America’s 4.2%.
Asia Pacific and Africa, Middle East & the rest of the world are also expected to be hit by the dip in advertising expenditure, with 2005 growth falling to 5.7% and 11.3% respectively. However, Latin America is expected to grow by 5.2%, despite Zenith saying that it is at greater risk of recession than any other region because of bank collapses and political instability.
The recovery continues well in to 2006, with Zenith predicting a 5.6% worldwide growth. Europe, which is expected to grow by 5.1%, is predicted to continue outstripping the US, which will grow by 4.8%.
Significant gains are also expected from other regions, as Asia Pacific is predicted to grow by 5.5%, Latin America 6.7% and Africa, the Middle East & the rest of world 11.2%.
| Year-On-Year Percentage Change |
| Major Media (newspapers, magazines, television, radio, cinema, outdoor, internet) |
| |
|
|
|
|
|
|
| |
|
2002 v 01 |
2003 v 02 |
2004 v 03 |
2005 v 04 |
2006 v 05 |
| North America |
|
1.8 |
1.8 |
6.0 |
4.0 |
5.2 |
| |
of which USA |
1.5 |
2.1 |
5.5 |
4.2 |
4.8 |
| Europe |
|
-2.3 |
1.1 |
4.7 |
4.4 |
5.1 |
| Asia/Pacific |
|
1.0 |
5.3 |
7.3 |
5.7 |
5.5 |
| Latin America |
|
-18.5 |
2.0 |
4.7 |
5.2 |
6.7 |
| Africa/Middle East |
|
22.5 |
19.3 |
13.4 |
11.3 |
11.2 |
| World |
|
0.1 |
2.9 |
6.2 |
4.8 |
5.6 |
| Source: ZenithOptimedia, October 2004 |
In terms of display advertising, television will continue to gain share over other medium, especially newspapers, which will see a slight fall in its slice of revenue over the next few years. Television is expected to take a 37.6% cut of advertising revenue, while newspapers take a 2.9% share and magazines 13.5%.
By 2005 however, television is expected to slightly increase its share, growing to 37.7%, compared to newspaper’s which will slip to 29.7%, although television’s growth is expected to steady by 2006, newspapers continue to decline to 29.6%.
As expected, although still taking a relatively a small proportion of display advertising money, the internet will be the fastest growing medium, with its share of revenue growing from an expected 3.5% in 2004 to 4.0% by 2006.
| Global Shares Of Display Advertising Revenue By Medium (%) |
| |
2002 |
2003 |
2004 |
2005 |
2006 |
| Newspapers |
30.6 |
30.2 |
29.9 |
29.7 |
29.6 |
| Magazines |
13.9 |
13.8 |
13.5 |
13.5 |
13.4 |
| Television |
37.1 |
37.1 |
37.6 |
37.7 |
37.7 |
| Radio |
9.0 |
9.0 |
8.8 |
8.7 |
8.7 |
| Cinema |
0.4 |
0.4 |
0.4 |
0.4 |
0.4 |
| Outdoor |
5.4 |
5.4 |
5.3 |
5.2 |
5.2 |
| Internet |
2.9 |
3.2 |
3.5 |
3.7 |
4.0 |
| Source: ZenithOptimedia, October 2004 |
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