Carat, the world’s largest independent media agency network, has forecast global advertising expenditure growth to be 4.9% in 2005, approximately in line with its previous estimation in September of 5.0% (see US Online Ad and Marketing Spend To Reach $14.7 Billion in 2005).
The media agency attributes its slight revision to the price of oil, weakness of the dollar and the US current account deficit, but remains positive about the overall outlook for this year.
Commenting on the predictions, Doug Flynn of Aegis Group, Carat’s parent company said: “2004 ended with a better than expected 6% growth in global adspend, helped by the continued recovery in the European markets.”
Flynn continued: “The one-off impact of the Quadrennial Effect, additional spend generated by major sports and political events, provided a fillip to global adspend in 2004 and we see 2005 growth settling at 4.9% with advertisers’ confidence stable and the market looking firm.”
Carat predicts internet advertising to continue to perform strongly in 2005, with growth forecast to reach around 20% in 2004 and 2005. The internet’s share of global adspend is currently 3%, but is expected to increase substantially over the next few years as the medium becomes an essential part of advertisers tool kit.
The internet’s dominance is confirmed by other industry experts, with research from Forester predicting online and marketing adspend in the UK to reach $14.7 billion in 2005 (see US Online Ad and Marketing Spend To Reach $14.7 Billion in 2005), while analysts eMarketer forecast it to rise by nearly 34% this year to $13 billion (see Online Adspend To Hit $13 Billion In 2005).
Carat also pinpoint the outdoor sector as performing well, with the consolidation of the industry and emergence of new formats driving the medium’s growth. Outdoor is shown to be least impacted by the fragmentation of the media and Carat predicts the move towards digital delivery to boost the sector.
Research published recently by Mediaedge:cia showed outdoor advertising to be one of the fastest growing media’s, with a total adspend of $5.5 billion in the US during 2004, a massive 91% increase over the last decade (see Outdoor Advertising One Of The Fastest Growing Media).
The study also revealed that newer forms of advertising, such as interactive billboards and those featuring audio or visual, have not yet had a significant impact on consumers, with just 37% claiming to have encountered these particular types of OHH advertising.
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