Ad Growth Suprises Analysts, Still Behind Pre-Recession Numbers

Posted on 10/20/2010 by Jim Pickerell | Printable Version | Comments (0)

Advertising growth is continuing to surprise analysts. ZenithOptimedia has upgraded its forecast for global ad growth in 2010 from 3.5% to 4.8%. The forecast for 2011 is a continued growth of 4.6%.

However, this positive news comes somewhat qualified. As a portion of world gross domestic product, advertising has shrunk from 0.88% in 2007 to 0.75% in 2010—and that percentage is not expected to rise as long as debt, unemployment and austerity threaten economic recovery.

Television and the Internet have done well during the downturn and are expected to continue to win market share. However, this does not help still photographers who rely mostly on sales to magazines and newspapers. In theory, there should be some trickle-down to image suppliers when Internet advertising revenue increases, but licensing prices for Internet image uses—whether in ads or for editorial purposes—are so low compared to the prices paid to reach a similar number of consumers in print that advertising revenue increases do not translate into similarly significant revenue increases for photographers.

In 2008, worldwide magazine advertising revenue was just under $55 billion. In 2009, it declined to $49 billion and it is expected to decline further, to $43 billion, in 2010. In 2011 and 2012, the decline is expected to continue, but at a slower pace. Advertising revenue for newspapers was $119 billion in 2008, declined to $97 billion in 2009 and is expected to decline to $94 billion in 2010.

These figures may not be an accurate representation of what is happening in the U.S., because newspapers play a much bigger role in communicating news and information in Europe, Asia and the developing countries than they do Stateside.

Steven Waldman, senior advisor to the chairman for the Federal Communications Commission, maintains there are currently half the number of journalists at both magazines and in the television newsrooms as there were only five years ago. Daily papers employ one third fewer people, and the numbers continue to decline.

Overall advertising revenue in North America is expected rise by 2.4%, due in large part to increased spending by large financial, retail and automotive companies. Political advertising is also having a major impact; local television advertising is up 61% from 2008.

Total ad spend in North America in 2010 is expected to be in excess of $160 billion, which is still a long way from the $179 billion in 2008. In Western Europe, advertising expenditures are expected to exceed $103 billion, down from $113 billion in 2008.

Copyright © Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to:  


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