PricewaterhouseCoopers (PwC) have released their annual global advertising revenue forecast, estimating that global revenues will rise by an average of 6.6% a year by 2012, reaching to $2.2 trillion. These figures position the sector as outpacing GDP, which is forecast to increase by 5.7%.
Advertising attached to watching videos on the internet and devices such as Apple’s iPod will account for 24% of growth in the sector and is projected to grow fastest at a compound annual growth rate of 19.5 percent to 2012.
Traditional media will continue to dominate market share and television is expected to rise 5.98% on a compound annual growth basis to 2012, despite Wall Street viewing the sector as one of the most vulnerable in a weakened economy.
“The oft-reported death of traditional media remains greatly exaggerated,” according to the report.
Digital and mobile revenue will only account for 11% of total spending, or $234 billion, in the next five years, while internet growth is expected to moderate to 19.5% compound annual growth rate through to 2012.
Asia Pacific and Latin America will be the fastest growing regions over the next five years, with double-digit increases expected in each region for several media types, including internet advertising and video games. Revenues will reach $85 billion in 2012, up from $51 billion in 2007, while Asia Pacific will see an 8.8% compound annual growth rate (CAGR), increasing from $333 billion in 2007 to $508 billion in 2012.
The US will remain the largest advertising market, but has the slowest growth forecast at 4.8% CAGR.
Jim O’Slaughnessy, global chairman, entertainment and media practice at PricewaterhouseCoopers, stated: “In the US consumers are taking a preference for free or heavily discounted ad-supported content and services in the new digital and mobile environment. This ensure that the importance of advertising will continue to grow – both to entertainment and media companies themselves and to their customers.”
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