With the U.S. economy finally showing signs of shaking off its recession woes, the ad biz is poised to enjoy a growth spurt over the next three years.
ZenithOptimedia sees overall U.S. ad spending growing 3.6% this year to $368 billion and popping another 3.8% next year and 4.8% in 2014 as major advertisers return to the marketplace in force.
The giant media services group, a unit of Publicis, forecasts that Internet ad spending will grow fastest this year, up 18%. Cable will outpace broadcast and the battered print biz may start to see a reprieve via gains in tablets and digital apps.
Zenith predicted that spending on cable will rise 10% this year compared with a 1% dip in broadcast network television.
This summer’s Olympic Games in London might not deliver like the Vancouver games did. Many events from Vancouver aired live, but this time, Zenith said, more people may watch online or on the rebranded NBC Sports Network (formerly Versus).
“Cable networks will continue to build momentum — especially those seen as alternatives to broadcast prime (USA, TBS, TNT, FX) largely thanks to the return of bid-spending automotive and financial advertisers,” Zenith said.
New cable channels like Disney Junior and a Sean “Diddy” Combs music net also will continue to invigorate the space.
Zenith sees cable ad spend jumping another 10.5% in 2013 and 11% in 2014.
Network TV ad spend will dip an estimated 2.5% next year and 3% in 2014.
Spending on broadcast ads actually outpaced cable in the fourth quarter of 2011, according to another ad-spending study released on Monday. According to Zenith’s numbers, that will flip back this year, indicating last year’s broadcast uptick was more of a recovery than a trend.
Zenith predicts a volatile 2012 for spending in the spot market, up 8% on political and Olympics marketing. It sees spot biz rising 2% next year and 4% in 2014. Consolidation of TV stations may well continue after a burst of activity last year with acquisitions by Sinclair and E.W. Scripps.
Firm sees syndicated TV trending down 12% this year, 10.5% next year and 11% in 2014, even with two big potential draws like Katie Couric and Queen Latifah hitting the market.
Network radio, meanwhile, is expected to grow 3%, 2% and 1%, respectively over the next three years.
For print, defining a strong tablet strategy is key as penetration of the devices jumped significantly over the holiday season and now stands at 19%. Consumers are also using newspaper websites more, with total minutes spent up 14% last year and average daily visitors up 15%.
On the world stage, the firm sees global ad spending growing by 4.8% this year to $489 billion, by 5.3% next year and by 6.1% in 2014. The outlook is a hair more positive than it was in December as risk of a disastrous collapse in the Euro zone has diminished.
Large companies that have built up cash reserves since the economic crisis of 2008 are starting to spend again, Zenith said, citing Unilever, Reckitt Benckiser Coca-Cola and PepsiCo, which have publicly announced plans to bump up advertising to launch new brands and build market.
That said, without quadrennial events — the summer Olympics, the European Football Championships, the U.S. presidential elections — which always provide a reliable boost to the global ad market, Zenith said spending in 2012 will rise 3.2%, slightly below last year’s level.
Some 60% of growth will come from developing markets, 49% from 10 alone, including the so-called BRIC nations — Brazil, Russia, India and China — along with Indonesia, Argentina, South Africa, South Korea, Mexico and Turkey.
China is the third largest ad market but closing in on second-place Japan and likely to outstrip it in 2015.
Global online display advertising is expected to grow 21% annually between 2011 and 2014 — faster than search, which Zenith sees growing by 15% a year, and classifieds, by 9%.
Internet spending as a percentage of total ad spending will rise to 22% in 2014 from 16.4% in 2011. It already accounts for more than 25% of all advertising in five countries: Denmark, Norway, Sweden, South Korea and the U.K.
The Internet will also account for 55% of the growth in total expenditure through 2014, and television for most of the rest.
Print advertising is seen shrinking 1% a year through 2014 but Zenith said that figure doesn’t include spending on websites, tablets or mobile apps.
Breaking it out by region for 2012: Western Europe will grow an estimated 1.5%; Central and Eastern Europe by 6.5%; North America by 3.6%; and Asia Pacific by 7.4%.
Latin America outstrips all with growth seen at 9.2%. The Middle East and North Africa is slowest, down 1% on political and social unrest.