GLOBAL ADVERTISING: World media on the move

Outdoor and cinema are making the biggest strides in the world's fastest-growing ad markets, as Adam Smith, the head of knowledge management at ZenithOptimedia, writes.

We expect this year's fastest-growing ad markets to put on a collective 13 per cent spend increase while the rest of the world stands still. This exclusive club will then account for 9.4 per cent of global ad expenditure, up from 8.6 per cent last year. Advertising occupies on average 0.7 per cent of their economies. The west averages 1 per cent plus, so there's plenty of room for growth yet.

Outdoor and cinema are the really rapid growers in these 20 markets.

Cinema is only 1 per cent of the ad market, but it is expected to grow by 17 per cent this year. For all the nationalistic sentiment film-making excites, there is no medium so globally homogenised. In four of our 20 markets, all the top- ten films in 2001 came from Hollywood. The lowest count we have is five of the top ten (Thailand).

We have box-office data for six of these 20 countries, and it seems that cinema admissions have been rising by between 10 per cent and 20 per cent annually over the past three to five years. The great irony and mystery of this medium is why cinema advertising is so rare in the US itself: my opposite number in New York was surprised to hear that we in the UK sit through 20 minutes of ads and trailers before the feature. And this comes from someone who puts up with 40 minutes' content per hour on network TV.

Outdoor is big in these emerging markets - 7 per cent of ad budgets against a global average of 5 per cent. We expect outdoor spend to rise 19 per cent in the fast-growing markets this year. We cannot point to specific evidence such as admissions to explain why this is so, but the medium seems to be improving in every direction - quality of reproduction, sites, research, versatility - as a consequence of consolidating ownership.

TV is, of course, the biggie, accounting for 54 per cent of these countries' advertising, with revenue likely to grow 14 per cent in 2003. The diversity, compared with cinema, could not be greater. In new and old markets alike, the most popular programmes are locally made. Formats and Hollywood hits are more famous than popular. Among these 20 countries, the only non-domestic items to score top-ten ratings recently were five transmissions in Romania (four films and a World Cup game); a film and Eurovision in Latvia; and one film in Russia. The only formats to make the grade were Millionaire (Hungary) and Big Brother (Mexico).

Radio and magazines are up with TV on about 14 per cent growth, but newspapers are what brings that growth average down. They account for 26 per cent of ad budgets and we expect their ad revenue to grow 9 per cent this year.

It will be interesting to see where this share is in 20 years' time.

Recruiting younger readers - or, more specifically, getting them to read more regularly - is a long-standing problem in the west. Around 45 per cent of the UK population is under 35, much as in the eastern European countries listed here. But in Asia and Latin America the proportion is 60-70 per cent. Birth and literacy rates are obviously among the many relevant variables, but this tide of youth is either a great threat or a great opportunity to the newspaper industry, and it is not yet clear which.

Looking for other patterns among these disparate nations, it is remarkable to find how widely used are ABC1-type socio-demographic labels. Unfortunately no two countries' categories are defined alike, so it is impossible to declare, for instance, how many ABs there are in Asia. It is perhaps more useful to weigh aspiration than absolute wealth; we are looking for the emergent middle-class consumer; the wellspring of future demand that keeps the whole advertising economy in motion. This is where the potential of these countries becomes really striking. For the sake of comparison, half the UK is ABC1. In these 20 countries, one can estimate that ABC1 attitude is confined to about 25 per cent of the population. In the Baltic states, the proportion is close to western levels. In the cities of China and India the figure rises to 40 per cent and 50 per cent respectively. In urban Indonesia it falls below 10 per cent.

In the usual way of things, this notional 25 per cent will prosper much faster than the rest of the population, since 25 per cent is nearly 700 million of the 3.5 billion in these 20 countries. The combined population of the European Union and the US is nearly 600 million. Let us imagine they are consuming at parity within 20 years. How long would you want to risk putting off building that brand?

TOP 20 COUNTRIES BY ADVERTISING EXPENDITURE GROWTH 2003/2002

Country Growth in Adspend GDP (est.)

adspend (%) 2003 2003

2003 v 2002 USdollars m USdollars m

1 Myanmar (Burma) 59.8 9.1 10,965

2 Russia 41.4 2,715 333,640

3 Turkey 31.6 798 156,041

4 Romania 24.3 700 43,161

5 Venezuela 21.3 2,237* 125,088

6 Indonesia 18.4 1,521 186,939

7 Hungary 18.0 1,318 61,150

8 Mexico 15.8 3,590 647,830

9 Vietnam 13.6 184 37,997

10 India 13.4 2,183 582,191

11 Lithuania 13.0 63 13,599

12 Laos 13.0 6.1 1,937

13 China 10.9 6,230 1,314,121

14 Argentina 10.0 538* 117,834

15 Panama 10.0 153 10,502

16 Pakistan 9.7 145 66,732

17 Chile 9.5 611 73,842

18 Brazil 9.0 5,405 521,703

19 Puerto Rico 9.0 2,131 47,838

20 Latvia 8.8 65 9,041

Country Adspend TV adspend Newspaper Magazine

as % GDP 2003 adspend 2003 adspend 2003

2003 USdollars m USdollars m USdollars m

1 Myanmar (Burma) 0.08 3.3 2.0 3.0

2 Russia 0.81 1,300 450 340

3 Turkey 0.51 340 290 35

4 Romania 1.62 557 59 37

5 Venezuela 1.28 1,099 312 21

6 Indonesia 0.81 969 389 82

7 Hungary 2.16 842 167 161

8 Mexico 0.55 2,247 502 297

9 Vietnam 0.48 103 55 0

10 India 0.38 898 1,022 0

11 Lithuania 0.47 27 20 7

12 Laos 0.31 2.6 1.2 1.0

13 China 0.47 2,527 2,305 173

14 Argentina 1.44 149 110 36

15 Panama 1.46 95 50 0

16 Pakistan 0.20 66 43 11

17 Chile 0.83 278 200 24

18 Brazil 1.04 3,146 1,168 575

19 Puerto Rico 4.46 1,378 547 53

20 Latvia 0.72 23 22 8

All figures except those with asterisks are in US dollars at average

2002 exchange rates.

*Exchange rates used: Argentina, US$1=3.5 pesos; Venezuela,

US$1=1.049 bolivars.

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