Global Ad Forecast Slashed in Half

Posted on 10/10/2008 by Julia Dudnik Stern | Printable Version | Comments (0)

Economic pundits are saying that the U.S. has entered its most significant crisis since the Great Depression. Though the American presidential race has placed the country’s economy in the global spotlight, the economic crisis is also global and will have a profound effect on the advertising revenues of developed markets.

This week, Publicis’ ZenithOptimedia, a media firm with offices in 192 countries, has slashed ad-revenue growth expectations by half for the U.S. and Western Europe.

The agency’s June forecast predicted U.S. revenue growth of 3.4% and 2.6% for 2008 and 2009, respectively. Zenith has downgraded these numbers to 1.6% and 0.7%.

Though Western European adspend projections have also been significantly reduced, the region stands to fare slightly better than the U.S. Zenith predicts the same weak adspend growth of 1.6% for 2008, but 2009 ad revenues are expected to grow by 2.6%.

Global ad revenues are expected to rise by 4% during the two years. Strongest growth will come from developing markets and Internet advertising.

Developing markets will be responsible for 65% of the growth through 2010, increasing their share of the global ad-revenue total to roughly a third. Russia and Brazil are expected to displace Spain and Australia among the world’s top 10 advertising markets. According to Zenith, the top-10 list also includes the U.S., Japan, Germany, the U.K., China, France, Italy and South Korea.

Internet-ad growth continues to outpace other media at 23% per year. Zenith predicts that online advertising will account for 13.8% of the global adspend by 2010. Internet ad revenues are expected to surpass those of magazines in 2009, for the first time. Zenith projects magazine advertising to bring in $59.4 million, and Internet ads are expected to beat that by over $2 million.

Luxury goods, travel and entertainment advertising are most likely to suffer ad-budget cuts. In general terms, companies that provide non-essential goods or services are most likely to find their ad budgets under threat, according to Zenith.

Copyright © 2008 Julia Dudnik Stern. 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


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