Follow The Money Dep’t: ZenithOptimedia’s latest global ad spend forecast

July 13, 2011 by Dave Haynes

The latest ad spend forecast by the big agency holding company ZenithOptimedia is full of very large numbers (like $471 billion) and percentage ups and downs, but the headlines are that ad spend is still growing, TV is still #1 by a mile and online is hot. Depending on how you want to look at things, Digital OOH is part of outdoor, or maybe you could make a reach and think of TV as video, and therefore include yourself there.

None of that matters day to day, but I think the continuing growth of TV – and its ongoing transformation from a scheduled, living room experience – is all positive.

Here’s part of what ZenithOptimedia is seeing in the market:

Global advertising expenditure by medium

The internet continues to grow at the fastest rate of any medium, at an average of 14.2% a year between 2010 and 2013. Display is the fastest-growing segment, growing by 16.4% a year, driven mainly by online video and social media. Streaming video ads are growing extremely quickly, thanks to the emergence of do-it-yourself tools that have allowed local advertisers to enter the market.

In most developed markets, social media sites are near the top of the list of most-popular websites, and they are often way ahead of their rivals in time spent by users. In the US, social media use has jumped 25% over the last year, and now accounts for 16% of all time spent online, and 34% of display impressions. Paid search is growing by 14.4% a year, but its growth is being slightly restrained by the shift in search behavior from desktop to mobile devices, where costs are currently lower.

Online classified is growing relatively slowly, by 9.1% a year, while employment and property markets remain weak in the biggest countries. Overall, we predict internet advertising will grow by US$31.3 billion, from US$63.7 to US$95.0 billion between 2010 and 2013, and by 2013 the internet will be the world’s second-largest medium, with an 18.3% share of spend.

Television is the next fastest-growing medium, at 6.2% a year. It is also the largest contributor to global growth, accounting for 49% of new ad dollars between 2010 and 2013. Television’s share of the global ad market has risen steadily over time and shows no sign of reaching a plateau: it attracted 40.1% of spend in 2010, up from 37.3% in 2005, and we forecast it to attract 41.4% in 2013.

The amount of time viewers spend watching television continues to increase, and even though viewers are presented with a wider choice of channels than ever, the biggest television events are attracting record audiences. This year’s Super Bowl, for example, was watched by 111 million Americans, making it the most watched broadcast in US history. It beat the previous year, itself a record breaker, by 4.2%. We forecast television ad expenditure to grow by US$35.4 billion, from US$179.6 to US$215.0 billion between 2010 and 2013.

Newspapers and magazines have been declining since 2007, with a brief pause for magazines in 2010, when ad expenditure remained essentially static. We expect this decline to continue throughout our forecast period.

Magazines are suffering less than newspapers, because the experience of reading a magazine is less easy to replicate online, and because they do not rely so much on the timely delivery of information, where the internet has a big advantage over newspapers. We predict magazine ad expenditure will shrink by 0.6% a year over our forecast period, while newspaper ad expenditure shrinks by 1.1%. In 2013, newspapers will fall behind the internet into third place, with a 17.9% share of spend.

Full report here …

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