Worldwide Media And Marketing Spend To reach $713 Billion In 2007

The study, This Year Next Year Worldwide is GroupM’s new media and marketing forecasting series drawn from WPP’s worldwide resources in advertising, public relations, market research and specialist communications. The first edition covers 32 countries representing 90%+ of the global economy.

GroupM says that 2006 media portion is 55% or $367 billion net of discounts, while TV supplies 52% of global growth followed by internet (21%) and newspapers (10%).

The thee biggest contributors by volume to the total 2006 media growth pool are the USA (23%), China (21%) and Brazil (15%).

The study also shows that the services portion (PR, market research, direct marketing and sponsorship) is 45% or $306 billion in 2006 and growing fractionally faster than media.

GroupM says that: “At this late stage of the economic cycle one would normally expect media growth to have run well ahead of GDP as healthy profits finance excess demand for diminishing media reach. One thing stopping this is the growth of the internet in developed economies. Its audience is growing even faster than its incoming tide of advertiser money, so it is actually getting cheaper. At the same time it is attracting cash from the big but fragmenting and hence inherently inflationary media, whose valuable reach is in shortening supply.”

The study also points out that global media growth is much more unbalanced than economic growth with Brazil expected to contribute more to total media growth than all of Western Europe combined.

ZenithOptimedia recently forecast that total advertising spend for the UK will reach £12.25 billion in 2006, up 4.1% on 2005 (see UK Adspend Predicted To Rise 4.1% On 2005).

The North Asia region (China, HK, Korea and Taiwan) is predicted to supply 25% of 2006 growth, as much as North America, which is four times bigger.

The study also shows that growth contributions from each medium vary hugely by each region, with internet as the lead growth medium in Western Europe (44% of new media revenue this year) and North America (37%), while TV leads by a large margin in every other region.

GroupM’s figures suggest that although marketing figures are growing faster than media advertising in North America, this is not the case in Europe, where direct marketing, the main element, is holding rather than gaining share. GroupM says that the most likely reason for this is internet substitution for costlier direct mail. In addition, the study notes that nearly everywhere the internet is categorised as a ‘medium’ rather than the marketing service which it is increasingly becoming.

This Year Next Year Worldwide shows that emerging economies employ more advertising and less marketing services. The split of global media billings between advanced and emerging countries was 67/33 in 2000. GroupM thinks that this will be 61/39 by next year, with this gearing being the main reason the marketing services share of the circa-$700 billion industry total has stuck at around 45%.

Media growth contributions % by medium
NORTH AMERICA	2005	2006f	2007f
Television	11	33	30
Radio	1	3	3
Newspapers	9	11	10
Magazines	40	9	14
Cinema	2	2	2
Outdoor	9	6	6
Internet	28	37	34
WESTERN EUROPE	2005	2006f	2007f
Television	42	33	33
Radio	7	5	4
Newspapers	0	3	3
Magazines	-2	9	11
Cinema	0	0	0
Outdoor	5	7	7
Internet	48	44	42
ASIA-PACIFIC	2005	2006f	2007f
Television	42	33	33
Radio	7	5	4
Newspapers	0	3	3
Magazines	-2	9	11
Cinema	0	0	0
Outdoor	5	7	7
Internet	48	44	42