Global and North American Ad Recovery Strengthening

But Rebound Seems Weaker Than the Gains That Followed Prior Downturns

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NEW YORK ( -- The global ad business is picking up momentum, according to a new forecast improving expectations for worldwide ad spending and swinging expectations for North America from a loss to a gain in 2010.

Global ad spending should increase 3.5% this year, an improvement over the 2.2% growth forecast back in April, according to ZenithOptimedia, the author of the new forecast.

But the recovery of the ad market is still lagging prior cycles, the report noted. "A strong downturn in global ad expenditure has historically been followed by a sharp rebound three years later," ZenithOptimedia said. According to the forecast, by 2012, the third year after the 2009 downturn, growth should equal roughly 5.3% -- a smaller rate of recovery than has followed previous downturns, ZenithOptimedia said.

In North America, the region that ZenithOptimedia upgraded the most, an earlier expectation that ad spending would decline 1.5% this year has yielded to a new forecast of 1.3% growth.

"This is because consumer confidence and spending has recovered quite strongly in the U.S., despite persistent unemployment," ZenithOptimedia said in its forecast. Ad spending in major U.S. media is likely to expand 1.1% this year, the new forecast projects. Canadian ad spending, while smaller, is regaining health much more quickly than in the U.S. and is expected to grow 5.4% in 2010.

North America's projected growth, on the other hand, remains the smallest of any region. ZenithOptimedia expects to see a 2.2% gain this year in Western Europe, 5.8% in the Asia Pacific region, 10.6% in the Asia Pacific region excluding Japan, 7% in Central and Eastern Europe, 7% in Latin America and 6.9% in Africa, the Middle East and the rest of the world.

By medium, TV performed fairly well during the downturn and is still collecting significant ad dollars in the recovery. Television will receive 40.8% of global ad spending in 2012, up from 39.2% in 2009 and 38% in 2008.

But the internet continues its global climb, according to the forecast. Its share of overall spending should rise from 10.5% in 2008 to 12.7% in 2009 to 17% in 2012, just two percentage points below newspapers, which have lost share every year since 1987, ZenithOptimedia said. Paid search is the main engine of the growth in digital advertising, accounting for 50.2% of all internet spending last year and likely to represent 52.6% in 2012. New display ad formats -- such as video, mobile and social media -- should, however, help display stabilize its share.

In the U.S., mobile advertising and social media are growing much more quickly than any other digital format, according to ZenithOptimedia, which projects mobile will grow an average of 43.2% a year between 2009 and 2012 while social media advertising grows 30.2% a year. That's compared to a 15.6% average growth rate for the internet as a whole in the U.S.

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