A tentative global economic recovery is beginning to fuel ad markets across the world: Ad expenditure is already accelerating in bullish developing markets, while the downturn is coming to an end more quickly than expected in the developed world, according to projections by ZenithOptimedia.
Global ad expenditure is now forecast to grow 2.2% in 2010, up from the 0.9% forecast in December 2009. The revised projection is the second consecutive upgrade.
Global ad spending projections for the next two years have also been upgraded, though less dramatically: 4.1% annual growth is now forecast for 2011, up from 3.9% forecast in December, and 5.3% growth is forecast for 2012, up from 4.8%.
That pattern of recovery is normal: After the previous two recessions it took three years of progressive recovery for the global ad market to return to normal growth.
Below, additional projections issued by ZenithOptimedia.
North-American Ad Market to Trail World Recovery
After suffering a deep 12.1% decline in 2009, the developed markets (North America, Western Europe, and Japan) are stabilizing. However, a 0.8% decline is forecast for developed-market ad expenditure in 2010, followed by positive 1.8% growth in 2011.
North America, having led the world into recession, will be last out: Ad expenditure is forecast to drop 1.5% in 2010, while it's expected to drop 0.7% in Japan and grow 0.4% in Western Europe.
Internet Advertising Stays Strong
The rise of the Internet continued uninterrupted in during 2009:
- The Internet increased its share of the global ad market from 10.5% in 2008 to 12.6% in 2009, overtaking magazines for the first time; that share is expected to increase to 17.1% in 2012.
- Paid search, the main engine of Internet growth, accounted for 50.2% of Internet ad spend; that share is forecast to reach 52.1% in 2012.
- Display accounted for 32.0% of Internet ad spend, down from 33.0% in 2008; that share is expected to fall again, to 31.7%, in 2010. However, new formats, such as Internet video, are likely to help drive growth in the category, to a projected 32.2% share in 2012.
Looking for great digital marketing data? MarketingProfs reviewed more than 200 research sources and selected 64 of the best to create the Digital Marketing Factbook a 144-page compilation of data and 110 charts, covering email marketing, search engine marketing, and social media. Also check out The State of Social Media Marketing, a 240-page original research report from MarketingProfs.
Internet to Overtake Newspapers
Newspapers and magazines have suffered the most during the economic downturn, and declines have been exacerbated by falling consumer interest in print and substitution of new media. By 2012 newspapers will account for 19.4% of global ad spend share, down from 25.1% in 2008, and magazines will account for 8.6%, down from 11.6%.
Television has suffered less than other media during the recession, because TV viewing increases during downturns (as a relatively inexpensive form of entertainment) and because its brand-building power is a complement to the Internet's strength in generating response and sales.
TV ad spending fell 6.7% in 2009, but its market share increased to 39.4%, from 38.1% in 2008. That share is expected to reach 40.6% in 2012 due to the rise of the developing markets, where television is generally a much more dominant medium than in developed markets.
About the data: Ad-expenditure projections are issued on a quarterly basis by ZenithOptimedia. The above projections were issued in April 2010.
