GroupM Sees 3.5 Percent Adspend Increase

NEW YORK: GroupM is forecasting a 3.5-percent increase in global ad spending this year, upping its previous projection of 1-percent growth, with a further 4.5 percent hike in 2011.

Ad spending worldwide is set to reach $451 billion this year, GroupM says in its This Year, Next Year report, following the 6.6 percent decline experienced in 2009. The U.S. will contribute $145 billion of that total spend, a 1.3 percent reduction on 2009, with a 2.4 percent increase forecast for 2011 to reach $149 billion. "The U.S media marketplace has clearly bottomed out earlier this year and we expect moderate growth in 2011 consistent with GDP improvement,” said Rino Scanzoni, GroupM’s chief investment officer. “Television and online spending will outpace other media as they lead with return on investment metrics."

Brazil, Russia, India, Indonesia and China, meanwhile, continue to be major drivers of ad spend growth. “China remains the world’s biggest contributor to ad growth in 2010, accounting for one in three of all net new ad dollars we expect this year, and one in five as the rest of the world catches up in 2011,” said Adam Smith, GroupM futures director. “Indonesia and India are the next biggest contributors from Asia. Our grouping of ‘new world’ countries accounts for 34 percent of the global economy this year and 30 percent of measured media investment.”

Asia Pacific overall will see ad revenues rise 8.2 percent in 2010 to $131.2 billion, reaching $139.8 billion in 2011. Western Europe, after suffering an 11.2 percent decline in 2009, will grow 2.1 percent this year to $102 billion and then 2.3 percent next year to $104.4 billion. Central & Eastern Europe, which was hit badly in 2009 with a 17.7 percent decline, will grow 6.5 percent this year before recovering to a 10.6 percent growth rate in 2011 to reach $20.4 billion. Latin America, which grew by 2.3 percent in 2009, is forecast to reach ad spend of $26.5 billion this year, an 11.3 percent rise, and then $28.7 billion next year, an 8.4 percent increase. The Middle East & Africa, meanwhile, will generate $15.5 billion in 2010, an 8.2 percent hike, and then $16.5 billion next year, a 6.7 percent growth rate.