Adspend predictions for 2008

Comments Suliman, “While the annual Coen Report does focus largely on ad activity in the United States, it is also an excellent indicator of developing global trends.”

Mediocre outlook for the US

The US economy is expected to grow much slower that the rest of the world, with resulting mediocre adspend results. Adspend should increase 3.7% to US$294.4 billion, a figure that is somewhat pepped up by the Super Bowl and the Beijing Summer Olympics promotions, as well as election advertising. Coen predicts that these increases will not be carried forth to next year making 2009 a dismal year for advertisers.

The Coen Report predicts that total worldwide adspend will reach US$653.9 billion in 2008, a gain of 4.6%. The outlook for advertising in most other countries is predicted to fare better than the US, thanks to better economic growth expected. The best adspend growth performers can be found in emerging markets, with the economic powerhouses of Russia, China and India leading the pack. Favourable economic conditions in Latin America and the Asia Pacific mean that many of these countries anticipate strong adspend figures. Growth in these countries offsets the downward spiral seen in developed countries such as Japan and Germany and bumps up the worldwide adspend perspective to 5.3%, contributing US$359.5 billion out of the advertising pie.

Internet adspend climbing

In 2007 the growth of Internet adspend drew money away from traditional activities and in the US was up 20% of the budget of national advertisers. Coen predicts that the Internet adspend will enjoy a sturdy 16.5% in 2008. Nevertheless, with all budgets coming under scrutiny in 2008, online marketers are also expected to think more carefully where they spend their cash this year.

While adspend growth is expected for South Africa, this will be somewhat tempered by economic pressures. “With inflation at about 7%, 2% above the Reserve Bank's target, we can expect that advertising budgets will be tighter this year,” comments Suliman. “However, 2008 is sure to be the year for online.”

Nazeer predicts that marketers will allocate much more of the budget to online offerings, with companies venturing into more adventurous territories, including social networking and blogging.”

Mobile penetration will continue to gather strength in the lower-to-middle end of the market, bringing with it more advertising opportunities for marketers. “Mobile communication is incredibly personal – a trend that is sure to be followed through in other media as advertisers attempt to befriend their prospective consumers.”