ZenithOptimedia Forecasts Slow, Steady Growth in Global Ad Spend

Global ad spending will trend upward as marketers pledge greater media investment and as concern of a disastrous collapse in the eurozone subsides, a new forecast by Publicis Groupe 's ZenithOptimedia said. ZenithOptimedia predicted that total global spending will grow 4.8% in 2012, reaching $489 billion by year-end. Its December forecast had been for 4.7% growth for 2012. At the time, the firm revised global forecasts down from an earlier version in 2011. ZenithOptimedia also revised its long-term predictions upward: 5.3% in 2013 (from 5.2%) and 6.1% in 2014 (from 5.8%). While the risk of collapse in Europe has "gone down, and advertising companies and consumers are more confident in the long-term in the global market," there is still concern, said Jonathan Barnard, head of forecasting at the firm. "The government is spending less to try to get debt under control, so there's less money going around in the economy. That has an effect on advertising." He referred to ZenithOptimedia's lowered projection for Western Europe, to 1.5% growth from 2.0%, and the dip for Central and Eastern Europe, to 6.5% from 8.0%. But Olympics-related spending continues to drive the small amount of growth in Europe and other global markets. The firm cited high gas and food prices and a still-lagging economy in the U.S., but it projects that ad spending will rise steadily in the region: 3.6% this year, 3.8% in 2013 and 4.8% in 2014. That also exceeds ZenithOptimedia's expectation in December for 3.5% growth in 2012. The largest increases in U.S. spending this year will be in internet (17.8%) and cable TV (10%). There's some bad news too. ZenithOptimedia predicts decreases in magazine spend (3%) and newspapers (8%) but anticipates continued growth in the tablet market. It attributes projected growth in the internet category to online video ads and social-media buys. The report also associates its confidence in global growth with public announcements by large marketers about spending more on advertising. They include Unilever, Reckitt Benckiser, Coca-Cola and PepsiCo. The strongest regions, such as Latin America -- with predictions for 2012 ad-spending growth up, to 9.2% from 6.0% -- that are turning heads. "Between 2011 and 2014, we predict that 60% of all the world's growth in ad expenditure will come from developing markets," the report stated. "Nearly half (49%) will come from just 10 developing markets." It added that Brazil, Russia, India and China are expected to account for 33% of global growth. Six other markets (Indonesia, Argentina, South Africa, South Korea, Mexico and Turkey) should each add between $1 billion and $4 billion to the global ad market, delivering another 16% of global growth. ZenithOptimedia also updated Asia Pacific to 7.4% growth this year from 7.2%. On the flip side, political and social unrest have tarnished the forecast for the Middle East and North Africa, to 1% growth from 1.5%.

ZenithOptimedia Forecasts Slow, Steady Growth in Global Ad Spend

Featured Stories