|Despite the stock market's double digit drop in the last quarter, ZenithOptimedia is projecting a 2.2 per cent increase in advertising for 2011, up from the agency's 2.1 per cent forecast in July. The report also forecasts a 3.5 per cent increases in both 2012 and 2013.
The media agency sees cable TV growing 12 per cent this year, while the broadcast networks decline 2 per cent and syndication slips 4 per cent, taking into account current economic conditions and its knowledge of its clients' plans for the upcoming season.
The report notes that woes on Wall Street often are not necessarily followed by an ad market decline. In 12 market crashes over the past 31 years. the agency said. "... half of the stock market crashes preceded an advertising downturn, but half did not." Most recently, says the report, "the sharp drop in the Dow in the U.S. after September 11 did not prevent the recovery of growth in 2002, though growth remained weak."
The report expects that cable networks will continue to build momentum, largely because of the return of big-spending automotive and financial advertisers. The forecast calls for cable to grow:
• 12.0 per cent in 2011
• 10.0 per cent in 2012
• 10.5 per cent in 2013
The agency expects the spot marketplace to be extremely volatile in 2012 with the presidential election year cycle generating a billion dollars or so in political spending. Adding to the frenzy will be the Olympics in August, bringing new and returning business to the local markets. All considered the report expects spot to TV to turn in annual increases of:
• 4.0 per cent in 2011
• 8.0 per cent in 2012
• 2.0 per cent in 2013
Video ads are "... becoming the main form of brand advertising in the digital space," the report says, adding that the streaming video category will see two out of every five ad dollars coming from local advertisers. The agency projects:
• 12.6 per cent Internet ad revenue growth in 2011
• 16.2 per cent growth in 2012
• 17.3 per cent in 2013
The analysis has made a reduction to its forecast for global ad expenditure growth in 2011 to 3.6 per cent, down 0.5 percentage points from the forecast made in July. The slowdown in economic recovery in the developed markets, coupled with rising fears of double-dip recession, have caused some advertisers to trim back budget increases planned for the end of 2011, but with no sign of the cancelled campaigns and sharp budget cuts that signaled the beginning of the last advertising downturn in 2008.
The report predicts global ad expenditure at 5.3 per cent growth in 2012, and 5.5 per cent in 2013. TV's share of total ad spent was 38.4 per cent in 2010 and should grow to 39.8 per cent in 2011 and settle at 40.5 per cent by 2013.
In summary, this picture is consistent with a history of ad market growth after many previous stock market shocks, assuming the world economy does not deteriorate dramatically:
• Global ad expenditure forecast to grow 3.6 per cent in 2011 after a modest slowdown in expenditure growth towards the end of the year
• Growth forecast for 2012 remains a reassuring 5.3 per cent
• Developing markets to increase their share of the global ad market from 31.0 per cent in 2010 to 34.9 per cent in 2013
• Internet the fastest-growing medium between 2010 and 2013 (14.6 per cent a year) Television to contribute most new ad dollars (46 per cent of total)
To view the chart on the Top Ten Advertising Markets (US$ million) - Australia named 8th. Click here.
To view the chart on the Advertising Expenditure by Medium (US$ million). Click here.
To view the chart on Internet Advertising by Type 2009-2013. Click Here