Zenith Downgrades Ad Forecast
ZenithOptimedia has downgraded its combined growth forecasts for North America and Western Europe this year, from 4.4% to 3.8%, as the credit crunch drains consumer and business confidence.
The combined result is a slight downgrade of global growth from 6.7% to 6.5%, still well above the 5.0% average rate at which the global ad market has grown for the last ten years, said Zenith.
Continued above-trend growth in 2009 and 2010 is predicted, owing to dynamism in Asia Pacific, Central & Eastern Europe, Latin America and the Middle East.
Zenith now predicts that developed markets (which we define as North America, Western Europe and Japan) will contribute 37% of new ad expenditure between 2007 and 2010, while developing markets (everywhere else) will contribute 63%.
Over that period the proportion of global ad expenditure going to developing markets will rise from 27% to 33%, two percentage points more than we forecast back in December.
By 2010 Zenith now forecasts internet ad expenditure to reach US$67 billion (up from US$61 billion in its last forecast), and account for 12.3% of the ad market (up from 11.5%).
Some of the internet’s growth is coming at the expense of newspapers, which Zenith expects to grow only 4% over the forecast period. After adjusting for inflation, this equates to a 5% decline in expenditure. Zenith counts advertising on newspapers’ websites as internet advertising, and this is helping newspaper publishers claw back some of their lost revenue.
| Advertising Expenditure By Region | |||||
| Major Media (newspapers, magazines, television, radio, cinema, outdoor, internet), US$ million, current prices. | |||||
| 2006 | 2007 | 2008 | 2009 | 2010 | |
| North America | 181,816 | 186,667 | 193,606 | 197,921 | 202,605 |
| Western Europe | 103,576 | 108,287 | 112,559 | 117,253 | 122,249 |
| Asia Pacific | 91,811 | 98,842 | 106,980 | 113,937 | 122,520 |
| Central & Eastern Europe | 24,124 | 28,756 | 34,010 | 39,527 | 45,143 |
| Latin America | 22,725 | 25,627 | 29,025 | 31,941 | 34,540 |
| Africa/M. East/ROW | 13,480 | 16,657 | 18,715 | 21,976 | 26,063 |
| World | 437,531 | 464,837 | 494,895 | 522,555 | 553,119 |
| Source: ZenithOptimedia | |||||
| Top Ten Advertising Markets 2010 | |
| Country | Ad Expenditure (US$ million) |
| USA | 194,063 |
| Japan | 43,875 |
| UK | 27,861 |
| China | 24,266 |
| Germany | 22,678 |
| Russia | 17,205 |
| Brazil | 14,223 |
| France | 13,486 |
| Italy | 12,319 |
| South Korea | 11,796 |
| Source: ZenithOptimedia | |
A recent forecast from Carat predicted that 2009 will see advertising growth of 4.9% worldwide, with the fastest-growing regions set to be Asia Pacific and Latin America (see Global Adspend Forecast To Grow 4.9% in 2009).
A new forecast published by the World Advertising Research Center in association with the Advertising Association, meanwhile, says that advertising expenditure in Europe will grow by 3.9% in 2008 (see European Adspend Forecast To Grow 4% In 2008).
UK adspend is expected to rise by 3.5% this year, while adspend in the US is set to increase by 4.4%, helped by the presidential elections.