ZenithOptimedia cuts global adspend growth forecast to 3.8%

The Eurozone's travails will dampen global adspend growth this year, despite the recovery in North America gathering steam, according to ZenithOptimedia, which has downgraded its forecast for a second time.

Europe: beats North America in golf, but not in adspend recovery
Europe: beats North America in golf, but not in adspend recovery

The global forecast had already been reduced from 4.8% in March to 4.3% in June, and the single currency area was again the culprit in the latest quarterly update.

Advertising spend in the Eurozone is now predicted to shrink by 3.1% this year, worse than the 1.1% retraction predicted in June.

The Publicis Groupe media agency tempered its pessimism with reassurance that this would swing back to 0.9% growth in 2013, albeit "assuming the eurozone remains intact".

It also upgraded its forecast for North America's growth in 2012 from 3.6% to 4.2%, noting a greater than expected outlay on political advertising for the presidential election and higher than expected ratings for the Olympics.

However, there was a cut to the forecast for Asia-Pacific, the second biggest region in terms of adspend, from 6.7% to 6.2%.

Commenting on the global forecast, Steve King, global chief executive of ZenithOptimedia, said: "Advertisers are broadly continuing to invest, despite the global economic concerns and issues. However, they are seeking to ensure that any expenditures are delivering strong return on investment.

"The US continues to deliver solid growth. This, combined with the growth in developing markets and in digital media, has helped mitigate the drop in eurozone spending."

Television advertising is expected to become a $200m global market this year, with its share rising from 40.2% last year to its highest ever at 40.4%.

Zenith commented: "The amount of time viewers spend watching television has increased, and even though viewers are presented with a wider choice of channels than ever, the biggest television events are attracting record audiences. The rise of the developing markets has helped lift television’s share as well, since these markets tend to rely heavily on television."

The inexorable rise of the internet will continue to play a key part in global growth, Zenith believes, tipping the medium for 15% annual growth between 2011 and 2014 at the expense of print.

It noted that the prospects for newspaper and magazine publishers are "not quite as bleak" as the headline figures would make them appear because the print figures do not include advertising in websites, tablet editions or mobile apps, which are picked up in the internet category.

Next year, global ad expenditure is predicted to grow 4.6% to $525bn, driven by growth in developing markets.

Advertising expenditure by region: major media (US$m current prices)
  2010 2011 2012 2013 2014
North America 162,165 165,104 172,039 178,313 186,344
Western Europe 106,344 108,688 107,885 109,668 112,642
Asia-Pacific 125,059 132,172 140,383 148,423 157,155
Central & Eastern Europe 24,181 26,151 26,631 28,592 31,089
Latin America 31,996 35,344 38,080 41,935 45,600
Middle East & North Africa 4,881 4,155 4,198 4,313 4,412
Rest of World 10,940 11,592 12,321 13,468 14,812
World 465,566 483,206 501,536 524,712 552,054

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