World adspend strength in developing countries
In its first advertising expenditure forecasts of 2008, ZenithOptimedia downgraded its combined growth forecasts for North America and Western Europe this year from 4.4% to 3.8%, as consumer and business confidence is negatively impacted by current economic conditions.
However, says the report, growth continues to strengthen elsewhere, and Zenith increased its 2008 forecasts for the rest of the world from 10.9% to 11.1%.
Other forecast highlights include:
• Developing market dynamism will maintain global ad growth above ten-year average despite sluggish growth in the developed world
• Developing markets will contribute 63% of ad expenditure growth between 2007 and 2010, and increase their share of the global ad market from 27% to 33%
• Asia Pacific will overtake Western Europe in 2010 to become second-largest ad market
• Internet will account for 9.7% of world ad expenditure this year and 12.3% in 2010.
Combined (North America, Western Europe, and the rest of the world) results point to a slight downgrade of global growth from 6.7% in the previous forecast to 6.5% - but still well above the 5.0% average rate at which the global ad market has grown for the last 10 years. Zenith predicts continued above-trend growth thanks to dynamism in Asia Pacific, Central & Eastern Europe, Latin America and the Middle East.
Developing markets will contribute significantly to growth in global ad expenditure:
• China and Russia follow closely behind the US as contributors to growth over the next three years, even though China's ad market is just 8% of the size of the US ad market, and Russia's is 5%.
• Brazil's contribution is very nearly the same as the UK's, while its ad market is less than half the size.
Other report highlights:
• Internet ad expenditure by 2010 is forecast to reach $67 billion and account for 12.3% of the ad market
• Online video and local search are now generating substantial new revenues; in the slightly longer term, behavioural targeting on social-networking sites is expected to provide fruitful opportunities to advertisers
• Newspapers are forecast to grow only 4% over the forecast period, which, after adjusting for inflation, equates to a 5% decline in expenditure
• Advertising on newspapers' websites is included in internet advertising and is helping newspaper publishers claw back some of their lost revenue.
• Cinema is growing rapidly in the US, where it is still quite new, and is benefiting from the spread of digital distribution technology
• Digital technology is likewise enhancing the value of outdoor to advertisers, as is contractors' investment in research and improvement of non-digital displays.
Note: Totals differ from AdSpend table because of difference in itemised categories by country, and fit by medium.
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