Online Fuels Global Adspend Growth

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 looking sustainable in the longer term, according to ZenithOptimedia.

Internet adspend will grow more than 28% in 2007, while the rest of the market grows 3.9%, with the medium becoming larger than Radio by 2009, according to the group’s latest forecast report.

The company predicts that the Internet will take nearly 9% of global adspend by 2009, with the potential to take 10%. The medium takes its highest share in the UK, where it will attract 13.5% of adspend this year and 21.5% in 2009.

Apart from the Internet, only Cinema and Outdoor are forecast to grow faster than the market to 2009. Newspapers and Magazines are still growing, by 3% and 4% respectively. Print adspend continues to grow by 1% a year, whilst Classified Advertising is migrating to the Internet or being substituted by auction or search sites.

ZenithOptimedia says that this is the first time the company has seen sustained loss of share on a global level for Television adspend, attributing the loss to the migration of viewers from premium mass-audience channels to cheap specialist channels.

The report also states that Radio is losing its share in developed markets, where it is suffering from substitution by paid services, such as satellite radio in the USA, and audio over the Internet.

Growth of major media in the US is forecast to be below the global rate, at 4.1% in 2007 and 2008. Western Europe is also predicted to see a rate of growth that is smaller than the global level, at 3.8% in 2007 and 4.1% in 2008.

China and Russia are forecast to become the second and third largest contributors of new dollars to the world ad market between 2006 and 2009, with each contributing 9% of the extra ad expenditure, with China rising from being sixth largest this year and Russia in thirteenth position for 2006.

GroupM has today forecast that global advertising growth is steady and in line with the global economy at 5.3% for 2006, and is set to be 5% for 2007, saying that Television has taken half of all global media investment growth, whilst the contribution of the Internet to global media growth will rise to 28% in 2007 from 27% in 2006.

In Latin America, Eastern Europe and emerging Asia, Television accounts for between 60%-75% of all new media dollars, whilst in the west, audience fragmentation is giving advertisers tighter targeting at stable or falling prices.

The Internet currently accounts for 6% of global advertising, and including search in all major markets, this increases to at least 8% and is adding a point each year. On this basis, GroupM conservatively predicts that the medium’s share is 14% in the UK and 12% in the US.

The group’s latest forecast report suggests that globally Radio is set to drop from 6% to 4% of all advertising expenditure next year, whilst Newspapers will rise 1% to 6% in 2007, Cinema and Outdoor will remain static at 1% and 7% for 2007 respectively.

ZenithOptimedia: www.zenithoptimedia.com GroupM: www.groupm.com