GroupM, ZenithOptimedia Downgrade Ad Forecasts

NEW YORK/LONDON: The quadrennial events—the summer Olympics, the European Football Championship and the U.S. Presidential elections and other political races—are expected to boost the 2012 global ad market, though GroupM and ZenithOptimedia have remained conservative with their forecasts, expecting slower growth than previously predicted.

GroupM’s newly revised forecast shows a 6.4-percent increase in global ad spending in 2012, which is down from a July report forecasting a 6.8-percent increase. Its new report, This Year, Next Year, predicts that 2011 will see a 5-percent increase in spending over 2010, to $490 billion. For the U.S. market, the report predicted 2011 ad spending of $147 billion, a 3.3-percent increase over 2010 spending. For 2012, U.S. ad spending should reach $153 billion, representing a 4-percent gain over 2011. Both of those figures were also down from the previous report, which predicted a 3.8-percent hike in 2011 and a 4.2-percent increase for 2012.

The latest figures from ZenithOptimedia shows that global ad spending in major media will grow 4.7 percent to $486 billion in 2012, 5.2 percent in 2013 and 5.8 percent in 2014. The numbers are down from its forecast in October, when the company predicted 5.3-percent growth for 2012. The agency also predicts that spending will end this year at $464 billion, 3.5-percent higher than in 2010.

According to ZenithOptimedia, the Internet will be the biggest contributor of new ad dollars to the global market. Between 2011 and 2014 it expects Internet advertising to account for 52.9 percent of the growth in total expenditure. After the Internet, the main contributor to global ad growth is television, which ZenithOptimedia forecasts to supply 41.1 percent of new ad dollars between 2011 and 2014. Television’s share of the global ad market has risen steadily over the last few years: ZenithOptimedia expects it to end this year with 40.2 percent of all ad expenditure, up from 37 percent in 2005.

“Japan’s advertising recovery has proved substantially more vigorous and resilient than we forecast in our mid-year report,” said GroupM’s futures director, Adam Smith. Additionally, the so-called ‘quadrennial effect’ of the American elections, the Olympics and European football are worth an estimated 1 percent of incremental growth in 2012. Smith also pointed out that the report’s forecasts across most of the faster-growing world in 2012 were unchanged from the previous report in July and that those nations account for 66 percent of global ad spending.