Global Adspend Growth Forecast In Line With GDP

The agency’s outlook for 2006 is also positive, with advertising spend estimated to be up 6.1% compared to just 4% for the economy. These latest figures, however, are slight downward revisions of Zenith’s previous predictions made in April of this year, when advertising spend was expected to grow by 5.4% in 2005 and by 6.5% in 2006(see Advertising Market Forecast To Remain Solid).

Advertising Expenditure by Major Media (US$ million, current prices)
	2003	2004	2005	2006	2007
North America	158,616	168,197	174,547	184,309	192,628
Europe	98,450	104,398	107,942	112,571	117,518
Asia/Pacific	73,573	79,625	83,654	89,121	96,112
Latin America	13,748	16,142	17,082	18,167	19,265
Africa/M.East/ROW	14,473	17,667	20,759	24,271	27,866
World	358,860	386,030	403,984	428,438	453,390
Source: ZenithOptimedia, July 2005

Year-On-Year Percentage Change
Major Media (newspapers, magazines, television, radio, cinema, outdoor, internet)
		2003 v 02	2004 v 03	2005 v 04	2006 v 05	2007 v 06
North America		1.9	6	3.8	5.6	4.5
	of which USA	1.7	6	3.8	5.7	4.5
Europe		1.4	6	3.4	4.3	4.4
Asia/Pacific		5.0	8.2	5.1	6.5	7.8
Latin America		0.9	17.4	5.8	6.4	6
Africa/Middle East		19.3	22.1	17.5	16.9	14.8
World	Â	2.9	7.6	4.7	6.1	5.8
Source: ZenithOptimedia, July 2005

Internet Growth Upgraded

Zenith has revised US$3.6 billion out of traditional media for 2005, but has added US$1.2 billion to the internet. The agency’s new internet total for this year is up 8% to US$16.4 billion since April’s forecast and this upwards revision is expected to be sustained in 2006 and 2007.

Television Hits A Plateau

According to Zenith, television’s share of global advertising spend appears to be peaking at 38% and the agency has reduced the medium’s 2005 adspend by US$2.3 billion to US$148.2 billion. The majority of this downgrade occurs in the USA – where several big advertisers are reducing and redeploying TV budgets – and in Japan, where there is brittle consumer confidence and advertising migration to the internet.

In the UK, the sharp correction of prolonged above-trend retail spending has led to Zenith marking UK TV down US$229 million.

Television’s share is stable in most developed markets, although it looks to have peaked in both the USA (37% in 1996) and the UK (33% in 1999) – two of the largest and mature TV advertising markets.

Zenith suggests that TV may now be on the verge of a long newspaper-like decline. Newspapers took 40% of global advertising spend throughout the 1980s before declining to, and stablising at, 30% today.

Global Shares Of Display Advertising Revenue By Medium (%)
	2003	2004	2005	2006	2007
Newspapers	30.6	30.2	30	29.8	29.4
Magazines	14	13.5	13.5	13.4	13.4
Television	36.9	37.5	37.3	37.4	37.4
Radio	8.8	8.6	8.5	8.3	8.2
Cinema	0.4	0.4	0.4	0.4	0.4
Outdoor	5.4	5.4	5.4	5.4	5.5
Internet	3.2	3.6	4.1	4.5	4.7
Source: ZenithOptimedia, July 2005