Global Ad Spending Growing Faster Than Expected

Rise Still Coming Most Quickly for Developing Markets and Digital Media

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NEW YORK (AdAge.com) -- Ad spending this year is growing more than expected and will continue to expand in the coming years, particularly in developing markets and on digital-media platforms, according to several new industry forecasts.

Global ad spending will grow 5.9% in 2010, according to new projections by WPP's Group M, which had previously forecast a 3.5% gain for this year. Next year will see global ad spending improve 5.8%, enough to break $500 billion for the first time, Group M said.

Another agency, Magna Global, is now expecting worldwide ad spending to grow 6.9%, up from its earlier projection of 5.6%. Ad spending will increase 5.4% next year, on the way to an average annual increase of 6.3% through 2016, according to Magna Global, part of the Mediabrands unit of Interpublic Group of Cos.

And a third new forecast, from the ZenithOptimedia unit of Publicis Groupe, projects that global ad spending will grow 4.9% this year, slightly better than the 4.8% it predicted back in October. Ad spending will increase 4.6% in 2011, 5.2% in 2012 and 5.2% in 2013, ZenithOptimedia said.

The gains won't be evenly distributed, of course. Between 2010 and 2013 ZenithOptimedia expects Japan to grow by 5%, North America by 9% and Western Europe to grow by 10%. The group predicted much faster growth for the rest of the world: 23% in the Asia Pacific region, 24% in the Middle East and Africa, 26% in Latin America, 31% in Central and Eastern Europe, and 36% in the Asia Pacific region if you exclude Japan.

During the same period newspapers and magazines will see ad spending decline 2% while outdoor sees 18% growth and TV and cinema each increase by 19%, ZenithOptimedia said. The internet's 48% expansion, meanwhile, will push its share of all ad spending to 17.9% in 2013 from 14% this year, according to the forecast. While display advertising's share of internet ad spending fell to 33.6% last year from 36.2% in 2006, the rise of internet video and social media is reversing that trend. ZenithOptimedia forecasts display to take 33.9% of internet ad spend this year and 35.0% in 2013.

"The key result of this update is the continued rise of developing markets and digital media, and their central role in driving global growth," said Steve King, worldwide CEO at ZenithOptimedia, in a statement accompanying its new forecast. "In fact the importance of the internet is underrepresented in these figures. Advertisers are investing a lot more in owned and earned media, where there activities do not count as ad expenditure in the traditional sense."

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