Developing markets remain strong
BERLIN — With markets around the globe feeling the squeeze of the financial crisis, it’s no surprise that advertising spend is set to decline worldwide next year.Yet growth in developing markets is expected to counterbalance declines in North America and Western Europe, according to a report published Monday by London-based ZenithOptimedia. In its analysis of major media, including television, newspapers, magazines, radio, Internet, cinema and outdoor, the media services agency predicts world ad spend will decline 0.2% next year, with North America seeing the biggest drop — 5.7%, compared with a 1% decrease in Western Europe. Asia Pacific and Central and Eastern European markets are expected to grow, but at slower rates than previously forecast. Ad growth also remains healthy in Latin America and the rest of the world. “It’s now clear that the ad market is in the middle of a sharp downturn that began in Q3 2008 and accelerated in Q4,” the report said, adding that “ZenithOptimedia has reduced its forecast for ad spend growth in 2009 from 4% to minus 0.2% as the fallout from the financial crisis has spread throughout the real economies of the developed world.” Painting a dire picture, the report states: “Consumer and corporate confidence has been severely shaken, and the economic outlook is uncertain,” adding that due to general economic volatility, “there is a greater degree of uncertainty than usual to our forecasts.” With the U.S. and several Western European countries, including Germany, officially in recession and others headed in that direction, ad markets in those regions have shrunk more quickly than the wider economy. The new figures are well down from the group’s previous forecast of 0.9% and 2.6% respective growth in North America and Western Europe, published just two months ago. Internet and TV advertising continue to buck the trend and are doing well worldwide. Television remains advertisers’ favorite medium, with a total annual spend of nearly $185 million this year. TV makes up 38% of all global ad spend and is expected to grow consistently, reaching $208 billion by 2011, or a 38.5% overall share. Internet ad expenditure, currently at $50 billion, or 10.3%, will grow by 18% in 2009 and take a 15.6% share of global ad expenditure in 2011. The report attributes the success of Internet advertising to the medium’s “innovation and accountability.” Newspapers, the market’s second biggest medium, looks set to continue its decline from its current $123 billion to around $115 billion in the next three years, dropping from 25.4% to 21.2% by 2011. Other media expected to see substantial growth in the coming years include cinema and outdoor. Cinema remains a relatively new medium for U.S. advertisers but is growing strongly, as is outdoor, with investment in traditional displays and digital billboards on the rise.
Want Entertainment News First? Sign up for Variety Alerts and Newsletters!