Carat Revises Global Adspend Forecast
Global advertising expenditure is expected to grow at 6.0% in 2006, according to a revised forecast from Carat, up from its previous forecast of 5.7%.
Carat expects UK television revenue to be down by nearly 7% in 2006, along with weak demand in newspapers, particularly in regional titles.
Net growth of 1.0% in the UK in 2006 reflects the strength of online, with total internet expenditure forecast to grow by 40%, outstripping magazine display advertising for the first time.
Meanwhile, European growth is stable and broadly in line with Carat’s June 2006 forecasts, at 4.4% in 2006 and 4.1% in 2007.
However, Carat says that within this certain countries have seen a weakening outlook whilst others have become more positive.
France is expected to show growth of 4.8%, well ahead of the 2.7% forecast in June and ahead of GDP growth. Although this level of growth is expected to slow in 2007 at 2.0%.
Carat says that Germany should show a return to growth, although only at 1.9% and 1.5% in 2007, consistent with Carat’s June 2006 forecast.
Italy is expected to show a positive trend in 2006 at 3.4%, with slight moderation in 2007, whilst Spain continues to be one of Europe’s strongest markets, with growth forecast at 4.6% in 2006 and 4.0% in 2007.
| Year On Year % Growth At Current Prices | |||
| 2005 (a) | 2006 (f) | 2007 (f) | |
| Global | 5.0 | 6.0 (5.7) | 5.8 (5.5) |
| USA | 4.0 | 5.4 (5.0) | 5.2 (4.7) |
| Asia-Pacific | 6.3 | 7.2 (6.4) | 7.4 (6.8) |
| Japan | 1.0 | 2.2 (1.0) | 2.1 (1.5) |
| China | 21.3 | 20.5 (20.5) | 20.0 (20.6) |
| Europe | 4.5 | 4.4 (4.5) | 4.1 (4.2) |
| UK | 5.5 | 1.0 (3.2) | 4.2 (4.6) |
| Germany | -0.5 | 1.9 (2.1) | 1.5 (1.5) |
| France | 2.5 | 4.8 (2.7) | 2.0 (3.5) |
| Italy | 3.1 | 3.4 (3.4) | 2.6 (3.1) |
| Spain | 5.1 | 4.6 (4.6) | 4.0 (4.0) |
| Figures in brackets show previous Carat forecast, issued June 2006 | |||
Growth in the US is forecast to accelerate from 4.0% in 2005 to 5.4% in 2006, moderating slightly to 5.2% in 2007. Carat adds that once again the key US market driver has been online, growing at some 20%.
The most significant change to regional forecasts comes from Asia-Pacific, where advertising expenditure is forecast to grow by 7.2% in 2006 and by a further 7.4% over 2007.
China is expected to continue to show strong growth at around 20.0% in 2006 and 2007, whilst other countries showing double-digit growth in the region are India, the Philippines and Indonesia, and these trends look set to continue in 2007.
Carat forecasts that online advertising expenditure in 2006 will increase by 27%, up from the previous forecast of 25%. This is equivalent to a 5.2% share of global adspend in 2006, up from 4.3% in 2005, and this share is expected to increase further in 2007, to 5.7% of global ad expenditure.
A recent forecast from Group M said that global advertising growth is steady and in line with the global economy at 5.3% for 2006, and set to be 5% for 2007 (see GroupM Forecasts Steady Global Ad Growth).
Meanwhile, ZenithOptimedia said that the global ad market is forecast to grow 5.4% in 2007, 5.8% in 2008 and 5.3% in 2009, staying ahead of the 5.1% rate it has grown at for the past ten years, with this growth fuelled by online (see Global Adspend Growth Fuelled By Online).