Revenue to fall 6.9% this year
The sharp decline in global advertising spending will continue this year, but growth should be on the horizon for 2010 if economic stimulus packages in the U.S. and other countries provide the necessary kickstart.
No region will be exempt from the downturn in ad spend, but the U.S. and Western Europe are predicted to suffer from a steeper decline than envisaged in December, according to the latest survey of international advertising by ZenithOptimedia.
Overall global ad expenditure will shrink by 6.9% this year, dropping from $487 billion last year to $453 billion.
However, in the U.S., where spend will suffer due to the lack of a big event like last year’s Beijing Olympics and U.S. presidential elections, the fall is forecast to be 8.7%, from $181 billion to $166 billion.
The media agency predicts growth of 1.5% next year followed by 4.5% in 2011, but warns these figures will be revised as more information becomes available.
As more people stay indoors during a recession, ZenithOptimedia notes that “television is doing relatively well in the downturn.”
Overall TV ad spend is expected to fall 5.5% this year, but this represents an increase in market share from 38.1% to 38.6%.
However, major TV networks won’t necessarily gain, warns ZenithOptimedia.
“The fact that viewers are watching more TV helps,” said the media buying outfit. “This will not necessarily benefit those large broadcasters that are suffering competition from hundreds of digital rivals, since the incumbents are continuing to lose share to the newcomers.”
Not surprisingly, the Internet is the only medium forecast to buck the trend and achieve higher expenditure this year.
Growth of 8.6% is predicted, down from 20.9% last year.
“Most of this growth will come from search advertising,” ZenithOptimedia said.
Across Europe, in 2009 the biggest fall in ad spending — 10.1% — is predicted for Spain; the figure in the U.K. is 8.7%, France 7.3%, 5.5% in Germany and 5% in Italy.
All of these markets are expected to recover in 2010, with the exception of Italy where a further decline of 0.8% is anticipated.