ZenithOptimedia
by Jack Loechner, Oct 10, 7:25 AM
Despite the stock market's double digit drop in the last quarter, ZenithOptimedia is projecting a 2.2% increase in advertising for 2011, up from the agency's 2.1% forecast in July. The report also forecasts a 3.5% increases in both 2012 and 2013.
The media agency sees cable TV growing 12% this year, while the broadcast networks decline 2% and syndication slips 4%, 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."
Top Ten Ad Markets (US$ Million, Current Prices; Currency Conversion At 2010 Average Rates)
2010 2013
Rank Country Adspend Rank Country Adspend
1 USA $151,665 1 USA $165,977
2 Japan 46,153 2 Japan 47,630
3 China 26,122 3 China 38,854
4 Germany 23,791 4 Germany 25,429
5 UK 18,086 5 UK 19,656
6 Brazil 14,716 6 Brazil 17,587
7 France 12,564 7 France 13,465
8 Australia 11,246 8 Australia 12,313
9 Italy 10,296 9 Canada 12,098
10 Canada 10,041 10 Russia 11,413
Source: ZenithOptimedia, October 2011
The report expects that cable networks will continue to build momentum, largely because of the return of big-spending automotive and financial advertisers. The forecast calls for cable to grow:
• 12.0% in 2011
• 10.0% in 2012
• 10.5% in 2013
The agency expects the spot marketplace to be extremely volatile in 2012 with the presidential election year cycle generating a billion dollars or so in political spending. Adding to the frenzy will be the Olympics in August, bringing new and returning business to the local markets. All considered the report expects spot to TV to turn in annual increases of:
• 4.0% in 2011
• 8.0% in 2012
• 2.0% in 2013
Advertising Expenditure By Medium (US$ Million, Current Prices Currency Conversion At 2010 Average Rates); And Share Of Total Adspend
2009 2010 2011 2012 2013
Newspapers 96,973 23.0% 95,416 21.5% 92,802 20.2% 91,911 19.0% 91,334 17.9%
Magazines 43,633 10.5 43,741 9.8 43,224 9.4 43,060 8.9 42,909 8.4
Television 160,199 38.4 176,826 39.8 184,929 40.2 196,182 40.5 207,056 40.5
Radio 31,778 7.6 32,169 7.2 32,899 7.1 33,906 7.0 35,117 6.9
Cinema 2,107 0.5 2,315 0.5 2,423 0.5 2,564 0.5 2,718 0.5
Outdoor 27,774 6.7 29,917 6.7 31,503 6.8 33,357 6.9 35,122 6.9
Internet 54,683 13.1 64,026 14.4 72,531 15.8 83,457 17.2 96,392 18.9
Total * 417,147 444,410 460,311 484,436 510,648
Source: ZenithOptimedia, October 2011
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% Internet ad revenue growth in 2011
• 16.2% growth in 2012
• 17.3% in 2013
Internet Advertising By Type (US$ Million, Current Prices Currency Conversion At 2010 Average Rates)
Ad Type 2009 2010 2011 2012 2013
Display $18,349 $21,875 $25,282 $29,713 $35,218
Classified 9,911 10,950 11,990 13,078 14,246
Paid search 26,423 31,202 35,259 40,666 46,928
Total 54,683 64,026 72,531 83,457 96,392
Source: ZenithOptimedia, October 2011
The analysis has made a reduction to its forecast for global ad expenditure growth in 2011 to 3.6%, 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% growth in 2012, and 5.5% in 2013. TV's share of total ad spent was 38.4% in 2010 and should grow to 39.8% in 2011 and settle at 40.5% 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% in 2011 after a modest slowdown in expenditure growth towards the end of the year
• Growth forecast for 2012 remains a reassuring 5.3%
• Developing markets to increase their share of the global ad market from 31.0% in 2010 to 34.9% in 2013
• Internet the fastest-growing medium between 2010 and 2013 (14.6% a year) Television to contribute most new ad dollars (46% of total)
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