Zenith: Global Ad Spend Shrinks A Bit More — Except For Online


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Global ad spending will grow 3.6 percent this year, says ZenithOptimedia, offering its second downward revision this year from 4.1 percent in April. In contrast, online is actually looking a little better with 14.6 percent average annual growth between 2010 and 2013, as tougher times accelerate the shift from traditional media spending.

Despite all the turmoil pressing down on ad spending — volatility on Wall St., fears about a deeper European debt crisis, a stalled housing and jobs market, the Publicis Groupe media shop’s forecast for 2012 is a reassuring 5.3 percent.

While TV is still the the primary driver of global ad spending, the internet is the growing the fastest. And within the online arena, display is hottest segment. Zenith breaks it down this way:

— Display is rising 17.2 percent a year, driven mainly by online video and social media.
— Paid search is growing by 14.6 percent annually. Interestingly, search’s continued rise is being dragged down a bit as searches go from the desktop to mobile devices, where costs are currently lower.
— Online classified is growing relatively slowly, by 9.2 percent a year, while employment and property markets remain weak in the biggest countries.
— In terms of online’s slice of the global ad spend pie, Zenith expects it to rise from 14.4 percent in 2010 to 18.9 percent in 2013, when it will overtake newspapers to become the world’s second-largest medium.

This has been a year of steady, but slight downward revisions — nothing drastic, but clearly a sign that last year’s recovery optimism has dampened. Zenith has issued its forecast in time for the Advertising Week that kicked off in New York City earlier today. Here’s some of the previous ones, which are probably just a tad optimistic at this point.

— WPP’s GroupM expects global ad growth of 4.8 percent in 2011 and 6.8 percent in 2012, while online is set to rise between 15- to 16 percent a year through 2012.

— IPG’s Magna Global said in April that online ads would rise 18.7 percent. It maintains that online advertising is expected to account for 17.3 percent ($30.1 billion) of total ad revenues and it expects this share will grow to 22.4 percent ($47.4 billion) in the next five years. The average growth per year will be 9.5 percent, which is quite strong in an economy expected to grow in the low single digits, on average.

— From Madison Avenue’s perspective to Wall St., Barclays Capital has also lowered its total ad spend forecast to 1.4 percent from 2.9 percent in this year. Also, Barclays now anticipates a 4 percent rise in ad dollars instead of a 5.2 percent in 2012.

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