Global ad spending this year will grow at a faster rate than last year, although economic uncertainty in many parts of the world is expected to temper that growth, according to recent ad forecasts.
MagnaGlobal, a division of IPG Mediabrands, released a revised ad forecast last month projecting that global ad spending will reach $449 billion this year, up 5.0%. However, that forecast was down from an earlier projection of 6.5% growth.
“This downward revision is due to deteriorating macroeconomic perspectives,” MagnaGlobal said in the report, pointing to continued uncertainty in Europe, particularly Greece, Italy and Portugal, which are expected to suffer full-year recessions in 2012.
However, quadrennial events—including the Olympic Games in London, the Poland/Ukraine European Soccer Championship and the presidential election in the U.S.—will drive an additional 1%-to-2% growth across geographic markets, MagnaGlobal projected.
“In the U.S., political and Olympic money will account for $3 billion of incremental ad spend, mostly on television [$2.4 billion related to the election; and $600 million generated by Olympic telecasts],” MagnaGlobal said in the report.
In October, MagnaGlobal issued a revised forecast for the U.S., downgrading its projected ad spending growth to 2.9% this year from an earlier projection of 4.8%.
The big winner this year will be Internet advertising, which will grow 11.2% and outrank newspapers to become the second-largest media category globally, accounting for nearly 20% of global advertising dollars (19.5% at $87.4 billion), according to MagnaGlobal.
TV advertising will grow 6.7% globally to $187.1 billion this year, while newspaper revenue will decline 1.0% and magazine revenue will decrease 1.3%, MagnaGlobal said.
In a separate forecast released last month, ZenithOptimedia said global ad spending would total $486 billion this year, up 4.7% over last year, “despite the continuing slowdown in Europe and fears that its debt crisis will get much worse,” according to the report. Next year, global ad spending is expected to grow 5.2%; and, in 2014, ad spending is expected to increase 5.8%.
In the U.S., ad spending will grow 3.5% this year and also next year, according to ZenithOptimedia. The fastest-growing ad categories in the U.S. this year will be Internet (up 12.6%) and cable TV (up 12.0%). Categories that will show decreases include newspapers (down 8.5%), business magazines (down 4.0%), TV syndication (down 4.0%) and network TV (down 2.0%).
ZenithOptimedia projected that Internet advertising, which now accounts for 15.9% of the total global advertising market, will make up 21.2% of total advertising by 2014.