ZenithOptimedia has predicted steady growth in worldwide advertising markets, with occasional “healthy hotspots” of adspend increase above and beyond previous estimates.
The company’s latest quarterly advertising expenditure forecast predicts global spend to rise by 4.8% in 2005, a figure broadly in line with previous estimates of 5%, while 2006 will become a “touch firmer” at 5.9%, up from predictions of 5.8% this time last year.
Ad expenditure in 2007 is now expected to grow by 5.7%, down slightly on last year’s estimates of 5.8%, while the company’s opening forecast for global ad spend in 2008 is 6% growth.
According to ZenithOptimedia, the USA is the largest contributor to global advertising growth, providing 33% of the ad dollars added between 2004 and 2008, while accounting for 41%-43% of global advertising.
The dynamic economies of Brazil, Russia, India, Indonesia and China are only 6%-10% of the sector but are all among the top eight growers according to ZenithOptimedia’s forecasts, predicted to supply 26% of global ad growth between 2004-2008.
By contrast, the five large European markets of the UK, Germany, France, Italy, and Spain are expected to make a contribution of 11% to global ad growth, with their combined share of the global market consequently shrinking from 19% to 17% between 2004-2008.
The internet continued to be viewed with trepidation in ZenithOptimedia’s latest forecasts, with the company stating that estimates of internet revenues are often revised upwards following their initial inception. The company’s current estimates are that online advertising will take 4.6% of ad spend this year, rising to 6.4% in 2008.
From 2005 to 2008 ZenithOptimedia predicts the medium will create US$15.8 billion new ad dollars, constituting 17% of total global ad growth over the four-year period. However, the company states that these estimates may be conservative, noting that in Sweden, an online leader, the internet already accounts for 9% of advertising and is forecast to rise to 12%.
Elsewhere the new report found a strong demand for market research, with expenditure on other forms of marketing communications and services at US$414 billion in 2005, slightly ahead of the display ad total. The estimate comprises direct mail, directories, price and other promotions, PR, market research, outbound telemarketing and miscellaneous specialist media.
As a whole, ZenithOptimedia reports that this group is growing at the same rate as display advertising, despite being held back slightly by direct mail and outbound telemarketing. According to the company’s estimates, market research will be the “star” performer within the sector, despite it accounting for only US$23 billion or 6% of current marketing communications/services expenditure. According to the new forecasts, market research will grow by 11% this year and at a similar annual rate 2006-2008 as advertisers “seek to improve return on marketing investment and offset the risks inherent to media fragmentation.”
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