BtoB

Ad spending grows as economy recovers

FORECASTS REVISED UPWARD

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Media forecasters MagnaGlobal and ZenithOptimedia also upped their advertising forecasts for this year and next. MagnaGlobal, a division of IPG's Mediabrands, last month revised its U.S. ad spending forecast to $170.4 billion for the year, up 2.8% over last year (excluding Olympics and political ad spending). This compares with an earlier forecast of 1.6% growth for the year. The inclusion of Olympics and political advertising boosts the latest forecast to 4.1% growth this year. “Normalized ad revenues should improve further next year as recovery continues to take hold,” MagnaGlobal said in the forecast. Next year, U.S. ad spending is expected to grow 3.1% and, over the next five years, it will grow at an average rate of 3.6% a year, according to MagnaGlobal. Also last month, ZenithOptimedia revised its global ad forecast to 4.8% growth this year from an earlier projection of 3.5%. For the U.S., ZenithOpti- media now projects growth of 2.2% this year, compared with an earlier estimate of 1.1%. Next year, global ad spending will be up an estimated 4.6%, and U.S. ad spending will rise an estimated 2.4%, according to ZenithOptimedia. Latin America saw the most dramatic revision, due to huge advertising increases in Brazil. Ad growth in Latin America is now expected to increase 16.8% this year, up from an earlier forecast of 7.0%. In terms of media, Internet advertising will grow 13.5% this year, cable TV will increase 8.0% and magazines will grow by 2.0%, ZenithOptimedia projected. However, other categories will not rebound as quickly. Spending on newspapers will be down 10.0% this year, and spending on b-to-b magazines will decline 6.0%, according to ZenithOptimedia. The Interactive Advertising Bureau reported that U.S. Internet revenue totaled $12.1 billion in the first half, up 11.3% over the first half of last year. The IAB study was conducted by PricewaterhouseCoopers. “With the strongest first half on record, 2010 has so far indicated that Internet advertising is back and better than ever,” said David Silverman, a partner at PwC Assurance. “While the recession clearly affected short-term growth in 2009, with double-digit growth in both search and display during the first six months of 2010, the long term prospects continue to be strong.” In the first half, search spending made up 47% of all online advertising and was up 11.6% over the first half of last year. Display advertising, which made up 36% of total online advertising in the first half, was up 15.8%.
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