Exclusive: TV Ad Performance Better Than Anticipated

PREMIUM: The television advertising business worldwide is in much better shape than was thought only a few months ago, according to figures due to be released shortly. The new annual advertising forecasts from the WPP conglomerate are due out next week, and we have a preview from Adam Smith, future’s director of Group M, WPP’s consolidated media investment management operation, serving as the parent company to agencies such as MediaCom and Mindshare.

In June, the group was estimating global advertising growth across all media in 2010 at 3.6 percent, but that number is likely to reach 7 percent instead, with growth in every region of the world. About 90 percent of total growth comes from television and the Internet. Even Japan is on the upswing, showing an estimated 2-percent gain, the first improvement in five years. In June, Group M was expecting zero growth there. And it was forecasting negative growth (-1 percent) in North America. Now Smith says that North America will probably show growth of about 6 percent this year, even though consumer demand has remained flat.

Latin America will probably show an improvement of 13 percent in 2010, according to Smith, better than the 11 percent predicted in June, while Asia-Pacific will be up to 14 percent (instead of 13 percent). Europe, the Middle East and Africa (EMEA) will probably come in at 5 percent (instead of 3.3 percent forecast in June).

In 2011, the world advertising picture will improve by 5 to 6 percent, Smith says in advance of Group M’s official estimates. Growth will again be lead by Asia-Pacific, up 11 percent (in line with Chinese growth of 11 percent), followed by Latin America, growing by 10 percent. Japan and North America will both probably grow by 3 percent, and EMEA is expected to be up by 4 percent, Smith says.

About 60 percent of advertising growth comes from eight countries (Brazil, Russia, India, China, Indonesia, Japan, Canada and the U.S.), and 33 percent from the BRIC (Brazil, Russia, India, China) markets. Television growth is very much a “new world” story, according to Smith, with developing markets generating about 75 percent of new money coming into TV advertising.

The Internet’s share of the global market will come in at about 16 percent this year, climbing to 17 percent next year. “Brand advertising is moving online,” Smith says. “Brands are more confident in the Internet. The potential of web analytics is pushing a structural shift.”