Global Ad Spending To Increase 6.8% In 2008
Global advertising spending in measured media is expected to show almost a 7% gain to $479 billion in 2008 compared to the previous year, when spending was up 6%, according to a new study from GroupM.
Expectations of media growth in North America, Western Europea and Japan, which combined represent nearly three-quarters of the global media economy, are in any case conservative.”
Smith also identified television and the internet as the primary engines of global ad growth, representing the vast majority of additional new investment in 2008.
He said: “We expect half of 2008’s new ad dollars to find their way into TV, which dominates advertising in emerging markets and is the lead medium in US elections and Olympics coverage. We predict internet will soak up 28% of new investment and lead advertising growth in the developed world, particularly Western Europe.
“The internet is far less important to growth in emerging markets, where TV advertising does the most to build brands and a consumer economy.”
Western Europe is the second largest media bloc, representing about 27% of total media investment. GroupM predicted its contribution to 2008 ad growth at only 16%, well below expected economic growth.
Spending in CHina, meanwhile, was expected to grow 25%, a decline from the previous year’s 29% growth but still a representative figure.
“China still contributes 21% of new media dollars ahead of our 2008 forecast and is thus our biggest contributor in 2008, ahead of the US with 20% and Russia and Brazil with 6% each,” said Smith.
Global Ad Forecast, 2006-2008 | ||||
Media USD, m | 2005 | 2006 | 2007f | 2008f |
North America | 160,752 | 169,029 | 174,116 | 180,961 |
yoy% | 4.2 | 5% | 3% | 4% |
USA | 150,773 | 158,091 | 162,585 | 168,594 |
yoy% | 4.2 | 4.9 | 2.8 | 3.7 |
Latin America | 12,107 | 14,379 | 16,586 | 19,287 |
yoy% | 29.1 | 18.8% | 15.3% | 16.3% |
Western Europe | 110,988 | 116,360 | 121,979 | 127,171 |
yoy% | 4.4 | 4.8% | 4.8% | 4.3% |
Emerging Europe | 13,967 | 17,110 | 20,559 | 24,227 |
yoy% | 20.9 | 22.5% | 20.2% | 17.8% |
Asia-Pacific (All) | 91,202 | 96,713 | 104,370 | 114,828 |
yoy% | 6.9 | 6.0% | 7.9% | 10.0% |
North Asia | 29,216 | 32,810 | 37,087 | 44,022 |
yoy% | 12.5 | 12.3% | 13.0% | 18.7% |
ASEAN | 7,410 | 7,999 | 8,715 | 9,529 |
yoy% | 10.1 | 7.9% | 9.0% | 9.4% |
Middle East & Africa | 8,385 | 9,630 | 10,982 | 12,417 |
yoy% | 11.8 | 14.8% | 14.0% | 13.1% |
World | 397,401 | 423,222 | 448,592 | 478,891 |
yoy% | 6.2 | 6.5% | 6.0% | 6.8% |
Source: GroupM |
Marketing, USD, m | 2005 | 2006 | 2007f | 2008f |
WORLD | ||||
PR | 5,896 | 6,530 | 7,076 | 7,631 |
Market Research | 23,002 | 24,473 | 25,963 | 27,532 |
Direct & Specialist | 226,866 | 240,271 | 254,433 | 268,022 |
Healthcare | 6,193 | 6,484 | 6,800 | 7,200 |
Sponsorship | 30,500 | 33,670 | 37,730 | 43,500 |
Total | 292,458 | 311,428 | 332,002 | 353,884 |
YOY% Change | ||||
PR | 7 | 11 | 8 | 8 |
Market Research | 7 | 6 | 6 | 6 |
Direct & Specialist | 6 | 6 | 6 | 5 |
Healthcare | 4 | 5 | 5 | 6 |
Sponsorship | 9 | 10 | 12 | 15 |
Total | 6.3 | 6.5 | 6.6 | 6.6 |
Source: GroupM |
Meanwhile, the Long Term Advertising Expenditure Forecast, compiled by the World Advertising Research Center on behalf of the Advertising Association, predicts 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).
The report looks at two possible scenarios for UK adspend, a ‘high option’ and a ‘low option’; the low option forecasts an adspend increase of 16.8% over the same period. In terms of compound annual growth rate (CAGR), this translates as 2.5% on the high option, but a mere 1.2% on the low.
A recent forecast from eMarketer predicted that UK online ad spending will pass £3 billion in 2008, and show healthy growth despite financial and political uncertainties in Britain (see UK Online Adspend To Pass £3bn In 2008).