GroupM’s latest global ad forecast says that advertising is easily keeping pace with robust growth in the global economy, despite negative news this year of debt fatigue, persistent inflation and tighter money.
GroupM adds that with global ad revenue in prospect to rise 6% in 2007 to $433 billion and 7% in 2008 to $462 billion, the USA is trailing the pack at half of this with 2.8% and 3.5% respectively.
However, it appears that the US will fend off China to remain the leading source of new ad dollars in 2007.
Old Europe’s modest ad recovery is parked at around 4% a year in the latest GroupM forecast, compared to growth of around 20% a year in New Europe, which is now generating $19 billion in ad revenues (more than Latin America) led by Russia (the world’s number 12 ad market this year).
Asia-Pacific will contribute 30% to world ad growth this year and 38% next year as Olympic related ad demand flow mainly into regional TV.
The US Presidential election is expected to generate a record $1 billion ad spend, with the Olympics likely to add another $1 billion in the US alone.
TV is providing about half of world ad revenue growth (47% in 2007, 52% in 2008), whilst internet contribution is falling from 32% in 2006 to predicted 30% this year and 22% in 2008.
However, internet is still the growth leader, supplying 50%-60% of new revenue in the developed world. GroupM adds though that it is now looking for signs of saturation: daily usage and broadband installation are close to plateaus in some developed markets.
GroupM estimates that worldwide sponsorship will be worth $38 billion in 2007 and $44 billion in 2008 – as big as measured internet and growing in double digits.
| Global Ad Forecast, 2006-2008 |
| Media USD, m |
2006 |
2007f |
2008f |
| North America |
167,794 |
173,019 |
179,655 |
| yoy% |
5% |
3% |
4% |
| Latin America |
15,126 |
17,795 |
19,778 |
| yoy% |
17% |
18% |
11% |
| Western Europe |
107,719 |
112,074 |
116,716 |
| yoy% |
4% |
4% |
4% |
| Emerging Europe |
16,222 |
19,320 |
22,694 |
| yoy% |
22% |
19% |
17% |
| Asia-Pacific (All) |
92,876 |
100,108 |
111,158 |
| yoy% |
8% |
8% |
11% |
| North Asia |
33,463 |
37,573 |
45,321 |
| yoy% |
17% |
12% |
21% |
| Asean |
7,828 |
8,754 |
9,785 |
| yoy% |
8% |
12% |
12% |
| Middle East & Africa |
9,563 |
10,854 |
12,177 |
| yoy% |
15% |
13% |
12% |
| World |
409,301 |
433,171 |
462,177 |
| yoy% |
7% |
6% |
7% |
| Source: GroupM |
The latest Bellwether report, for Q2 2007, showed that ad budgets are growing at their fastest rate for seven years, with one in five companies reporting upward revisions to their marketing budgets (see Q2 2007 Bellwether: Marketing Budgets Revised Up).
In a separate forecast, GroupM predicted that UK adspend will grow 2.6% this year, totalling £26 billion (see UK Adspend To Grow 2.6% In 2007).
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