The global TV advertising market is set for a tough two years, with the outlook improving from 2010 to 2012, according to a new forecast from Screen Digest.
The research predicts that 2008 will be a difficult trading year for TV advertising, with spend growing at a lower rate than the economy, at only 1.9% in Europe and 1.5% in the US.
However, TV advertising revenues will enjoy a welcome quadrennial boost from key events including the Beijing Olympics, the European football championship and the US elections.
Whilst these events will help avoid a recession for TV ad revenues this year by neutralising the effect of the slowing economy, their effect will be temporary and will not be able to bolster the fragile advertising environment.
Screen Digest forecasts that advertising revenues will grow below average GDP growth between 2008-2012, with annual growth rates of 3.6% in Europe and 3.7% in the US.
The growth rate in 2011-2012 will be higher as the economy picks up after 2008/2009, at 5% in Europe and 6% in the Europe. Most of this growth will be come from online advertising, which is expected to grow on average by 17% every year until 2012.
Vincent Létang, Screen Digest senior analyst and author of the research, said: “Advertising spending tends to amplify economic cycles – and in some instances it actually anticipates downturns. Although we’re not expecting advertising budgets to be affected this year, thanks to the quadrennial events, Screen Digest believe we’ll experience the real impact in 2009, which will be the toughest year for advertising revenues.
“Whilst the overall picture for ad revenues is flat or in decline, two areas will enjoy growth – online will continue to grow at a pace, buoyed up by a strong search advertising market and digital TV channels will be taking a larger proportion of ad budgets by 2012, at the expense of the traditional broadcasters.”
The recent Long Term Advertising Expenditure Forecast, compiled by the World Advertising Research Center (WARC) on behalf of the Advertising Association (AA), predicted that advertising expenditure in the UK could grow by as much as 37.9% in real terms by 2019 (see UK Adspend Could Grow 38% By 2019).
Meanwhile, GroupM forecast that the UK will be the first major economy where advertisers spend more online than on TV ads.
GroupM UK said that internet adspend will overtake TV adspend in 2009. In addition, the media planner and buyer said that Sweden will this year become the first country in which advertisers spend more online than on TV (see UK Online Adspend To Overtake TV In 2009).
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