Where's the Growth in Marketing? Follow the BRIC Road

Ten Emerging Markets Will Account for Half of Ad Spending Growth in Next Three Years

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Where is the ad market going? Consider this: Total ad spending in emerging markets is expected to pass that in the U.S. in 2014. And hotspots, including BRIC and others, are moving up the ranks.

China, the biggest of BRIC, surged past Germany to become the third-largest ad market in 2010, according to Publicis Groupe 's ZenithOptimedia. China major-media ad spending is on track to overtake No. 2 Japan in 2015.

Explore the chart for a closer look.

The other BRICs are also rising. This year, Brazil was No. 6, while Russia came in No. 11 and India was No. 16, according to ZenithOptimedia. In a list of up-and-comers known as MIST, Mexico ranked No. 15; Indonesia, 17; South Korea, 12; and Turkey, 24.

"Emerging markets are the main source of ad-expenditure growth," said Jonathan Barnard, head of forecasting at ZenithOptimedia. "Over the next three years, half of all global growth in ad expenditure will come from just 10 markets: the BRICs, the MISTs, South Africa and Argentina."

Ad spending over the past 25 years

WORLD OF CHANGE: Ad spending over the last 25 years
The 25 largest ad markets this year include 10 emerging ones: BRIC, MIST, South Africa (No. 14) and Thailand (No. 22 ), according to the tally by ZenithOptimedia. Argentina ranked No. 26.

Among the 100 largest global advertisers, 13 companies allocated more than 10% of 2010 measured-media spending to China, according to Ad Age 's Global Marketers report.

That China-focused group includes powerhouses of personal care (Procter & Gamble Co., L'Oreal, Colgate-Palmolive Co.), food and beverage (Coca-Cola Co., Mars, PepsiCo) and luxury and alcohol (Estee Lauder Cos., LVMH Moet Hennessy Louis Vuitton, Pernod Ricard, Chanel).

One global advertiser stands out in China: Yum Brands, parent of KFC. China accounted for 29% of the fast-food company's measured-media ad spending and 36 % of its worldwide revenue last year.

P&G generated about $5 billion (6% of revenue) from Greater China in the year ended June 2011 and is counting on big growth ahead.

"The average Chinese spends less than $3 a year on Procter & Gamble products," Chairman-CEO Bob McDonald told analysts in August. "But in the United States, the average [person] spends nearly $100. So while we're leading, while we're growing -- we're growing strong double digits (in China) -- we still have work to do."

Meanwhile, P&G's revenue in India and Brazil is growing even faster, with an annual growth rate above 20%.

Avon Products is the Global 100's most BRIC-centric advertiser, putting nearly 40% of 2010 measured-ad spending into those countries.

Brazil passed the U.S. last year as the beauty-product company's biggest single market. Russia also is a key Avon market.

Spending among the leaders in 2010 was on a growth trajectory -- a shift from 2009, when top-100 worldwide spending tumbled 8.7% amid the global recession.

Much of the growth was powered by outlays outside the U.S., according to Ad Age 's 25th annual Global Marketers report. Total measured-media spending for top-100 advertisers jumped 12.0% in 2010, to $121.6 billion, driven by a 15.5% boost outside the U.S., vs. a 6.5% gain in the U.S. The 100 invested 63% of their measured-media budgets outside the U.S. in 2010, up from 61% in 2009.

Ad Age DataCenter produced the Global Marketers ranking from 2010 data contributed by measured-media tracking services covering 98 countries, territories and regions.

The roster of Global Marketers has changed notably over the past 25 years. Changes reflect international growth of blue-chip marketers such as L'Oreal, McDonald's Corp. and Walmart Stores; the emergence of newer global players such as South Korea's Hyundai Motor Co., Samsung Electronics Co.and Kia Motors Corp.; the rise of new categories (most significantly wireless phones); and the effects of mergers and divestitures.

The very top of the list hasn't had too much movement, though. P&G was the biggest worldwide spender in both 1986 and 2010. Unilever rose to No. 2 from No. 3, and General Motors to No. 4 from No. 5.

But the sea change in the last quarter century is where global advertisers spend their money.

The non-U.S. portion of P&G's measured-ad spending rocketed to 71% last year from 22 % in 1986. Sixty-three percent of the company's revenue came from outside the U.S. in the year ended June 2011.

Unilever's non-U.S. measured spending jumped to 88% in 2010 from 53% 25 years ago. Non-U.S. markets accounted for 85% of Unilever's revenue last year.

Markets outside the U.S. grabbed 40% of GM's measured spending last year, up from 16% in 1986. GM generated 46% of its revenue from outside the U.S. in 2010.

Make no mistake: The U.S. remains the powerhouse of advertising, with spending more than three times that in No. 2 Japan, according to ZenithOptimedia. But the U.S. share of major-media ad spending (TV, print, radio, cinema, outdoor and internet) fell to 33% in 2011 from 44% in 1986.

Advertising spending in emerging markets is reaching a tipping point. Such outlays will make up 33.2% of worldwide major-media spending in 2014, edging out the U.S. share of 32.0%, according to Ad Age DataCenter's analysis of ZenithOptimedia forecast data. Emerging markets accounted for just 4% of worldwide major-media ad spending in 1986.

Per-capita spending in emerging markets remains a fraction of that in the United States. Advertisers spent $498 for every man, woman and child in the U.S. in 2011, according to Ad Age 's analysis of the data. They spent $22 per capita in China -- roughly the U.S. per-capita ad expenditure in 1946. But consider how far China has come: Its per-capita ad spending in 1986 was just 9ยข.

Want more global marketing data? Check out the full report in Ad Age 's DataCenter at AdAge.com/globalmarketers2011.

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