Global Adspend to Hit $479 Billion in 2008

LONDON, January 25: A new study
from WPP’s GroupM says that global advertising spending in measured media will
increase 6.8 percent to $479 billion in 2008, up from an estimated 6-percent
gain in 2007.

The study, This Year, Next Year, found that television and the Internet will represent the
vast majority of additional new investment in 2008. The rate of growth in the
U.S. continues to lag behind the rest of the world, with a 2.8-percent increase
last year and only a 3.7-percent projected gain in 2008. Global adspend in North
America will hit nearly $181 billion in 2008, while revenues will reach $168.6
billion in the U.S. this year.

“We expect half of 2008’s new ad
dollars to find their way onto TV, which dominates advertising in emerging
markets and is the lead medium in U.S. elections and Olympics coverage,” said
Adam Smith, the director of GroupM Futures who oversees all This Year, Next
Year reports. “We predict Internet will
soak up 28 percent of new investment and lead advertising growth in the developed
world, particularly Western Europe. The Internet is far less important to
growth in emerging markets, where TV advertising does the most of build brands
and a consumer economy.”

Western Europe is the
second-largest media bloc, representing about 27 percent of total media
investment, but GroupM predicts that its contribution to 2008 global ad growth
will only be 16 percent, well below the expected economic growth. Adspend in
Western Europe will decrease to 4.3 percent, with revenues of $127.2 billion. Meanwhile,
spending in China will rise 25 percent, a slight decline from the previous
year’s 29-percent growth. In the Asia-Pacific, total ad revenue will reach
$114.8 billion in 2008, a 10-percent gain over the previous year.

According to GroupM, China still
contributes 21 percent of new-media dollars in the company’s 2008 forecast and
is ahead of the U.S. with 20 percent, as well as Russia and Brazil with 6
percent each.

“Encircling economic gloom has not
affected GroupM’s view of marketing investment in 2008, which is supported by
events including the American elections, the Beijing Olympics, and the European
soccer championship,” said Smith. “Expectations of media growth in North
America, Western Europe and Japan, which combined represent nearly three-quarters
of the global media economy, are in any case conservative.”

—By Irene Lew