ZenithOptimedia Lowers Global Adspend Forecast

World adspend growth for 2009 has also been downgraded, from 6% to 4%, with developed markets hardest hit by the reduced liquidity in the financial markets: growth forecasts for 2008 and 2009 cut by half in North America and Western Europe.

Developing markets are forecast to contribute 65% of ad expenditure growth between 2007 and 2010, and increase their share of the global ad market from 28% to 32%.

Internet advertising is still growing 23% a year and is forecast to account for 13.8% of world adspend in 2010.

The latest figures from the Internet Advertising Bureau show that UK internet advertising expenditure grew to £1.68 million in the first half of 2008, a 21% year-on-year like-for-like increase (see Internet Advertising Spend Up 21%).

Advertising Expenditure By Region
Major media (newspapers, magazines, television, radio, cinema, outdoor, internet) US$ million, current prices. Currency conversion at 2007 average rates.
	2006	2007	2008	2009	2010
North America	183,417	188,300	191,639	193,365	200,810
Western Europe	113,449	119,922	121,846	125,062	130,490
Asia Pacific	94,758	101,939	108,693	114,398	122,121
Central & Eastern Europe	25,843	31,629	36,463	41,097	46,169
Latin America	22,701	26,406	29,058	31,876	34,911
Africa/M East/ROW	14,043	17,258	18,657	20,815	23,974
World	454,211	485,454	506,356	526,614	558,475
Source: ZenithOptimedia

Major Media (Newspapers, magazines, television, radio, cinema, outdoor, internet) Year on year % change
	2006 v 05	2007 v 06	2008 v 07	2009 v 08	2010 v 09
North America	5.3	2.7	1.8	0.9	3.9
of which USA	5.2	2.5	1.6	0.7	3.8
Western Europe	5.6	5.7	1.6	2.6	4.3
Asia Pacific	6.7	7.6	6.6	5.2	6.8
Central & Eastern Europe	18.6	22.4	15.3	12.7	12.3
Latin America	14.9	16.3	10.0	9.7	9.5
Africa/m East/ROW	26.8	22.9	8.1	11.6	15.2
World	7.3	6.9	4.3	4.0	6.1
Source: ZenithOptimedia

Zenith said that unlike in the periods leading up to the last two ad downturns, advertisers have not been increasing their budgets ahead of economic growth over the last few years.

In the years preceding the downturns of 1990 and 2000, ad expenditure grew well ahead of the general economy, rising as a proportion of GDP and peaking at 1.07% in 1989 and 1.05% in 2000. This left the ad market vulnerable to sharp corrections when the economy slowed.

In recent years, however, ad expenditure has roughly tracked the economy, and has remained at 0.92%-0.93% of GDP. There is no bubble in ad expenditure to burst, which is why Zenith expects global ad expenditure to slow in 2008 and 2009 rather than to go into reverse.

Zenith predicts that developing markets will contribute 65% of new ad expenditure between 2007 and 2010. Over that period the proportion of global ad expenditure going to developing markets will rise from 28% to 32%.

By 2010 Russia and Brazil are expected to be top-ten ad markets – sixth and eighth largest respectively, up from 13th and 11th in 2007 – pushing Spain and Australia out of the ranking.

Global Advertising Expenditure By Medium
US$ million, current prices. Currency conversion at 2007 average rates.
	2006	2007	2008	2009	2010
Newspapers	127,473	130,032	128,277	127,217	128,444
Magazines	56,040	57,920	58,433	59,407	61,279
Television	168,355	179,268	187,496	193,854	203,770
Radio	36,990	38,391	39,469	40,033	41,324
Cinema	2,031	2,265	2,458	2,664	2,910
Outdoor	28,048	31,050	33,132	35,117	37,752
Internet	30,404	41,038	51,054	61,729	75,803
Total*	449,341	479,964	500,319	520,021	551,283
Source: ZenithOptimedia
*The totals here are lower than the totals in the ‘Advertising Expenditure by Region’ table since that table includes total adspend figures for a few countries for which spend is not itemised by medium

In July, Magna forecast that worldwide advertising spending will rise 4.4% this year, with the UK expected to see 3% growth (see Global Adspend To Grow 4.4% This Year).