ZenithOptimedia Trims 2013 Ad Growth Forecasts

LONDON: ZenithOptimedia has slightly increased its ad-growth forecasts for 2014 and 2015 while downgrading its expectations for 2013 to a rate of 3.5 percent.

The 2013 growth prediction is 0.4 percentage points lower than previously estimated. ZenithOptimedia downgraded its 2013 prediction due to the continued economic problems in the eurozone as well as security concerns in South Korea. Global ad revenues are set to hit $505 billion by year end. The media agency sees the growth rate rising to 5.1 percent in 2014 and 5.8 percent in 2015, both slightly higher than earlier estimates. 

Internet advertising will lead the recovery in 2014 and 2015, ZenithOptimedia says, thanks to improved measurement of the effectiveness of online ad buys, localization, mobile device integration and the rising use of online video and social media. However, television will continue to take the bulk of ad dollars—40.1 percent in 2012, dropping to 39.5 percent in 2015.

“The global advertising market is continuing to show steady growth on its path of recovery," said Steve King, CEO, worldwide, at ZenithOptimedia. "Internet advertising is driving adspend growth, and after several years of market expectation, mobile is at the forefront of this. Mobile devices are now integral parts of the lives of many consumers around the world, but still present huge untapped potential for marketers to engage with consumers in a personal, interactive and highly effective way."

In Europe, the "Peripheral eurozone"—Portugal, Ireland, Italy, Greece and Spain—has taken the biggest hit, with ad spend expected to drop 10.3 percent this year. Stabilization is expected for 2014, with a 2.7-percent recovery in 2015.

The Northern & Central Europe bloc, encompassing the rest of Western Europe plus markets like Czech Republic, Hungary and Poland, is expected to see a 0.7-percent decline this year, rebounding slightly by 2 percent next year.

Eastern Europe & Central Asia, including Russia, Ukraine and Kazakhstan, is showing a healthy growth rate of 9 to 10 percent for this year and next. Japan is also improving, with a 2.4-percent growth rate expected for this year.

Advanced Asia—Australia, New Zealand, Hong Kong, Singapore and South Korea—has had its growth rate downgraded due to concerns about South Korea. Ad spend is expected to slip slightly this year before recovering to a 7-percent increase in 2014.

The rest of Asia, dubbed Fast-track Asia—China, India, Indonesia, Malaysia, Pakistan, Philippines, Taiwan, Thailand and Vietnam—is growing rapidly, with a 10.6-percent growth rate predicted for this year, followed by 10 to 11 percent annually over the next two years.

Adspend in North America is set to rise by 3.5 percent this year, and 5 percent in 2014 and 2015. Latin America, meanwhile, is expected to have 8.9-percent adspend growth this year, rising to 9.1 percent next year. And in the Middle East and Africa, after a massive decline in 2011 and slight improvement last year, this year’s prediction is for a 5.5-percent growth rate, rising to almost 9 percent in 2015.

The U.S. remains the world’s largest ad market and will remain so through 2015, followed by Japan, China, Germany, the U.K., Brazil, Australia, Canada, South Korea and Russia.