Global Ad Spend Hurt by Events in Japan and Middle East

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Unrest in the Middle East coupled with the earthquake and subsequent tsunami in Japan will cost the global advertising industry $2.5 million in revenue this year, according to forecasts by Publicis-owned ZenithOptimedia.

The media buying network initially forecasted 4.6 percent growth in worldwide spend for 2011, but this week revised that figure down to a 4.2 percent increase owing to "immediate consequences for advertising" in markets including Japan and Egypt. The company predicted spending contractions in those territories of 4.1 percent and 20 percent, respectively, for 2011.

Growth in both of those markets is expected to resume in 2012, however, with Japan seeing a 4.6 percent increase, and a 12.1 percent recovery forecasted for the Egyptian industry that year. Zenith said the long-term fallout of the declines is likely to be minimal however, stating, "we do not expect these shocks to derail the global recovery in the long term."

Overall Zenith predicted global ad spending to grow 5.8 percent in 2012, revised up from the 5.2 percent prediction it made in December, and for online ads to capture an increasing portion of overall ad budgets in that time. By 2013 Internet advertising will have overtaken newspapers as the world's second largest advertising medium behind T.V., the company posited.

In terms of digital channels specifically the report predicted global display and search ad investment will grow at similar dollar rates, with investment in the former increasing from $25 billion in 2011 to $34 billion in 2013. Search, meanwhile, will grow from $35 billion in 2010 to over $46 billion over the same period.

Overall global Internet ad spend is therefore expected reach almost $72 billion in 2011, growing to almost $95 billion in 2013.