Group M Increases Global Ad Spending Expectation for 2010

And Reduces Projected Decline for the U.S.

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NEW YORK (AdAge.com) -- Group M has increased its growth expectations for global ad spending in 2010 and cut its projected decline for U.S. ad spending.

Earlier this year the group -- which includes WPP media agencies Mindshare, MediaCom, Mediaedge: cia and Maxus -- projected that global ad spending would increase only 1%. But now Group M has now revised that forecast to 3.5%, or $451 billion.

The study, "This Year, Next Year," expects U.S. ad spending to decline 1.3% to $145 billion in 2010 from $147 billion in 2009. That's a decline but still an improvement over its last worldwide report in December, which anticipated a 4.3% drop for the U.S. this year.

U.S. spending declined 7% in 2009, according to Group M. The light at the end of the tunnel will be visible around 2011, according to Group M's futures director, Adam Smith, and chief investment officer,Rino Scanzoni, when they predict spending will increase 2.5% to $149 billion.

"The U.S. media marketplace has clearly bottomed out earlier this year and we expect moderate growth in 2011 consistent with GDP improvement," Mr. Scanzoni said in the statement. "Television and online spending will outpace other media as they lead with return-on-investment metrics."

Activity in the Brazil, Russia, India, Indonesia and China, in particular, drove the increased global growth expectations for 2010.

"China remains the world's biggest contributor to ad growth in 2010, accounting for one in three of all net new ad dollars we expect this year, and one in five as the rest of the world catches up in 2011," Mr. Smith said. "Indonesia and India are the next biggest contributors from Asia. Our grouping of 'new world' countries accounts for 34% of the global economy this year and 30% of measured media investment."

Not surprisingly, Mr. Smith also said digital-advertising expenditures were driving worldwide advertising expenditure growth.

"What continues to power the medium is the steady advance in creativity, analysis and technology, which embeds digital in almost all marketing activity," Mr. Smith said. "Measured internet added two points of global ad share in each of 2007, 2008 and 2009 and we think it will sustain a rate of one point a year this year and next, to reach 16 percent in 2011."

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