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Advertisers Revise Ad Spend Forecast for 2012

29 Aug 2012

Growth in overall ad spend in 2012 has been revised down from 3.8 per cent in December 2011 to 1.3 per cent according to the Starcom Media Futures Mid-Year Update.

Advertisers contacted for the Media Futures Mid-Year Update reported that average growth in ad spend for the first half of 2012 was 1.8 per cent, down from a predicted annual increase of 3.8 per cent in December 2011. And the second half of the year is expected to be tighter still with spend forecast to increase just 0.8 per cent.

This is the second year in a row that advertisers have overestimated their budget growth rate and revised it down in the mid-year survey.

This year, advertisers have reported the lowest proportion of increased ad spend in the three years since the mid-year update was launched. Only 38 per cent of budgets increased in the first six months compared with 44 per cent at the same time last year.

"These figures reflect a trend we have observed over the past few years, with advertisers exercising a cautious approach to spending in a climate where there is still uncertainty over the global economic conditions," Starcom MediaVest CEO John Sintras said.

The first six months

Online expenditure is one area which continues to grow in terms of the proportion of ad dollars spent. Total online spending - taking in display/banner, search and mobile - was up for 62 per cent of advertisers whose budgets have increased. Free-to-air TV and newspapers were nominated as areas of significantly increased ad spend by 38 per cent of advertisers whose budgets have increased followed by STV, radio, magazines and out of home all on 25 per cent.

The mid-year update found that among advertisers whose budget has increased, most (62 per cent) were expecting the level of change, but among those whose budget decreased, most (67 per cent) did not expect the size of their budget change.

The next six months

In the second half only 33 per cent of advertisers are predicting an increase in their advertising budgets, continuing a downward movement seen over the past two years (this figure was 45 per cent in the 2010 mid-year update). Overall among advertisers whose budgets are increasing, this change is much smaller than the first half of the year at 0.8 per cent.

"The past two years of the survey have shown the mid-year update is a much closer forecast to actual spend, so it's likely to be a very tight end to 2012," Sintras said.


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