NEW YORK (AdAge.com) -- Despite Paul Krugman's warning to marketers last week that the economy won't be making a full recovery any time soon, Publicis Groupe's ZenithOptimedia has again released a rosier forecast than before.
The agency upgraded its forecast for global ad spending this year to 4.8%, up from the 3.5% it projected at the beginning of July, the fourth consecutive upgrade after a stretch in which it downgraded forecasts six times in a row.
All regions are growing faster than the agency expected. Ad spending will rise 2.4% in North America, instead of 1.3% as previously projected, and 3% in Western Europe, rather than 2.2% as previously forecast, it said. The biggest upgrade belonged to Latin America, however, where the agency now expects a 16.8% increase instead of 7% after "an explosion of growth" in Brazil.
North America is benefiting from the return of most large financial, retail and automotive spenders, ZenithOptimedia said. "Political advertising spend on local TV is 61% higher than in 2008, and, alongside PR spend by BP, is pushing sales by TV stations in Florida, Texas and Louisiana to record levels," its report said. "Magazine readership is up, and publishers have invested heavily in new titles -- 68 new magazines launched in July, for example."
TV and web doing well
Television did relatively well in the downturn and continues to show growth. It will attract 41.6% of global ad spending in 2012, the agency said, up from 39.2% in 2009 and 38% in 2008. The web, meanwhile, continues its steady rise, increasing its global market share from 10.5% in 2008 to 12.8% in 2009. By 2012 ZenithOptimedia expects the internet to account for 16.5% of total expenditure. Paid search is the main engine of the internet's growth, the agency said. It accounted for 49.2% of all internet ad spending in 2009 and will reach 51.4% in 2012.
But display advertising in mobile and social media is also on a tear. "In the U.S., where they are most visible and best measured, mobile advertising and social media are growing much faster than any other internet format," the report said. "Between 2009 and 2012 we forecast mobile advertising to grow by an average of 44.3% a year, while social-media advertising grows by 31.2% a year, compared to 14.6% a year for the internet as a whole."
Newspapers, on the other hand, continue the slide they began back in 1987, when they accounted for 40.6% of expenditure. In 2009 that share had been nearly halved to 23%, according to ZenithOptimedia, and it is likely to fall to 19% in 2012.