Jonathan Barnard, head of publications at ZenithOptimedia, said: "We are not looking at a double dip in the ad market.
"While the recovery is gathering pace, we are certainly keeping a close eye on things and there are certain economic factors that would risk dragging the market back down again or reducing the rate of growth."
The agency has upgraded most of its forecasts for Western Europe, despite concerns over Eurozone debt, after advertisers demonstrated willingness to spend in the first half of the year. It now predicts 2.2% growth in 2010, up from 0.4%.
Western European spend will increase during 2010 to $102,090m (£66,745m) from $99,919m (£65,234m) during 2009. This is expected to increase to $108,259m (£70,772m).
The only market that has not been upgraded upgraded is Spain, one of the most vulnerable Euro markets, which has been downgraded from 0.4% growth to minus 0.7%. However, growth in the region is expected to build up gradually in 2011 and 2012, to 2.6% and 3.4% respectively.
North America is the region that has been upgraded the most in the survey, up by 2.8 percentage points. In comparison, ZenithOptimedia in its last forecast said it expected the region to shrink 1.5% during 2010, but now the forecast is for1.3% growth.
This is because consumer confidence and spending has recovered quite strongly in the US, despite persistent unemployment.
Over the next few years ZenithOptimedia said it expected slow improvement in Japan together with continued impressive growth from the rest of the region, generating 5.8% growth for the region as a whole in 2010, followed by 6.5% in 2011 and 7.5% in 2012.
Overall the agency network is forecasting 1.3% growth from developed markets (North America, Western Europe and Japan) in 2010, compared to 8.6% growth from the rest of the world.
In 2011 the gap between developed and developing markets will narrow slightly, but growth in developed markets will remain modest.
ZenithOptimedia said it forecasts developed markets to grow by 2.4% in 2011 and 2.9% in 2012, while developing markets will grow by 9.1% and 9.8% respectively.
The agency expects developing markets to drive most of the growth in global ad expenditure over the next few years, contributing $39bn (£25.4bn) of the extra $60bn (£39.2bn) the agency expects to see added to the world ad market between 2009 and 2012.
Central & Eastern Europe suffered more from the downturn than any other region, losing 24.6% of ad expenditure in 2009.
The region is now split between those markets that quickly recovered and are now making up lost ground, notably Belarus, Bosnia and Herzegovina, Russia, Serbia, Slovenia, Turkey and Ukraine, which were forecast to grow by between 11% and 26% this year, and those where entrenched economic problems are still dragging down ad expenditure namely Bulgaria, Estonia, Greece, Hungary and Latvia, which were expected to shrink by between 3% and 16%.
Zenith Optimedia said that it predicted Greece – suffering from debt crisis and austerity – faces the most prolonged decline, with a 13.9% drop in ad expenditure in 2010, followed by a 7.0% drop in 2011 and a 0.3% drop in 2012.
All other markets in Eastern Europe were expected to return to growth in 2011, however, and forecast steady improvement in ad expenditure for the region as a whole, from 7.0% growth in 2010 to 9.8% in 2011 and 10.9% in 2012.
Barnard said that although figures suggested that the advertising industry was unlikely to experience a "double dip" that the industry had to look out for two things, possible financial problems in southern Europe and lack of consumer confidence due to fears over unemployment.
"Over the last couple of months, one of our main worries has been the public debt in European economies; in particular we are looking at countries in southern Europe and whether the public debt can actually be financed.
"Places like Greece, Portugal, Spain and there finances could potentially cause a huge amount of concern amongst advertisers, which could lead to quite a large reduction in budgets in certain countries."
Bernard added: "Persistent unemployment is also a problem, even though we are looking at economic recovery in terms of GDP (Gross Domestic Product), which is positive, if not huge, we’re not really seeing large reductions in unemployment numbers.
"For consumer confidence to truly recover, we really need to reduction in unemployment and new jobs created and people feeling that they’re secure in their current jobs."