ZenithOptimedia Projects Ad Growth

LONDON, October 7: Despite
the economic downturn, advertising revenues worldwide will grow by 4.3 percent
this year, according to ZenithOptimedia, led by markets like the Asia Pacific
and Central and Eastern Europe.

Worldwide advertising
expenditure is forecast to reach $506.4 billion this year, with the 4.3-percent
growth rate down from the 6.6 percent previously forecast by the research firm.
“The reason for the downgrade is primarily the financial shock caused by the bank
failures during the latest phase of the crisis in financial markets, which has
spread uncertainty and undermined confidence in financial markets,” the report
states. “The bank failures will have a fairly small direct effect on ad
expenditure…but fears for the future will cause consumers to cut their
spending, while companies carefully inspect their budgets to find cost
savings.”

The credit crunch in the
U.S. has promoted ZenithOptimedia to roughly halve its North American and
Western European growth forecasts. North American adspend will reach $191.6
billion this year, a 1.8-percent growth rate, with just 0.9-percent growth
expected next year. Western Europe will see 1.6-percent growth rate this year
to $121.8 billion, rising to 2.6-percent growth next year.

ZenithOptimedia forecasts
a strong outlook for developing territories. Asia Pacific adspend will reach
$108.7 billion in 2008 with 6.6-percent growth. Central & Eastern Europe
has double-digit growth rates, reaching $36.5 billion. Latin America is expected
to be up 10 percent this year to $29.1 billion. Africa, the Middle East and
rest of the world will reach $18.7 billion in adspend.

Developing
markets—all territories outside of North America, Western Europe and
Japan—will contribute 65 percent of new ad expenditure between 2007 and
2010. In that period, the proportion of global ad expenditure going to those
markets will rise from 28 percent to 32 percent. This shift will reshape the
top ten list of ad markets by 2010, with Russia and Brazil bumping Spain and
Australia out of the rankings.

By medium, television
continues to dominate, with $187.5 billion in revenues this year, rising to
$203.8 billion in 2010. TV’s share of the ad pie will remain stable at about 37
percent. Internet advertising will show significant gains, taking a
13.8-percent share by 2010, up from 10.2 percent this year.

—By Mansha Daswani