ZenithOptimedia Releases New Ad Forecast

LONDON: Asia, Central and Eastern Europe and Latin America are all expected to see their ad markets rebound in 2010, according to new research from ZenithOptimedia, with North America and Western Europe to follow in 2011.

The firm downgraded its ad forecasts for the year and is now projecting an 8.5 percent decline in the global ad market to $456.5 billion, picking up to $463.8 billion in 2010 and then $483.8 billion in 2011—still below the $499.1 billion peak in 2008. The mild recovery of 1.6 percent for next year is expected to be driven by the Winter Olympics, the FIFA World Cup and the U.S. midterm elections, ZenithOptimedia says. Nonetheless, North America will suffer its third year of decline in 2010, to $158.8 billion from $162.7 billion this year. Western Europe, meanwhile, will remain flat at about $112 billion, rising to $115.4 billion in 2011. 

In the Asia Pacific, after a 5 percent decline this year, the market is expected to grow 4.7 percent to $107.8 billion next year and then 6.3 percent to $114.6 billion in 2011, while Central and Eastern Europe will, after a 15.3 percent drop, rise from $29.8 billion this year to $33.9 billion in 2011. Latin America will grow to $35.3 billion in 2011 from $30.4 billion this year. In Africa, the Middle East and rest of the world, the ad market is set to increase in the next two years to $23.5 billion from $18.3 billion, with a 16 percent growth rate this year and 10.6-percent growth rate in 2011.

The research also points to 25 markets out of 79 covered that are experiencing growth this year; China, for example, with a 5.4 percent growth rate, is set to overtake the U.K. as the world’s fourth largest ad market. And India, growing 7.7 percent this year, overtakes Norway, Mexico and the Netherlands to take the number 14 spot. By 2010, 62 out of 79 markets will have returned to growth.

By medium, newspapers and magazines will continue to experience decreases, while TV ad spend is expected to rise from $173.6 billion this year to $179.5 billion next year and $186.9 billion in 2011. The Internet is also on a steady growth track, increasing from $56.8 billion in 2009 to $72.1 billion in 2011.

In conclusion, the report states: "The return to growth in 2010 and 2011 will bring no end to the pain of many big media owners. New technologies are reducing entry costs, providing a lot of new competition for the established players. Television networks are losing viewers to digital channels and video websites; newspaper websites are losing readers to bloggers; radio stations are losing listeners to podcasts; and so on. Competition for consumers’ attention, and the ad revenue that comes with it, will only get more intense as the world economy recovers."