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GroupM Revises Global Ad Forecast Downward

  |  December 5, 2011   |  Comments

The media group pegs 2012 growth at 6.4 percent, still better than this year. Olympics and U.S. election will be buoys.

Story has been updated with MagnaGlobal and ZenithOptimedia revised forecast data.

Spending on advertising worldwide will rise 6.4 percent in 2012 to $522 billion, according to an annual forecast by GroupM. The prediction is a slight downward revision from a forecast that GroupM made this summer. In July, the WPP media group predicted a 6.8 percent global bump in 2012.

Digital media should provide 43 percent of the global growth in 2012, according to the report, despite increasing by the same percentage in 2012 as it will in 2011. GroupM predicts that digital will jump 16 percent both years, bringing the total market to 84.7 billion in 2011 and 98.2 billion in 2012.

"We expect digital to comprise 22 percent of all measured ad investment in mature western economies in 2012, and 12 percent in the faster-growing world," said Smith.

GroupM is not the only global media agency to revise its 2012 growth estimates downward. IPG's MagnaGlobal and  Publicis Groupe's ZenithOptimedia this week also cut their forecasts slightly; both now forecast growth of 4.7 percent.  

Fueling the modest rise will be spending on the Olympics, the U.S. presidential election and European Football. An advertising recovery in Japan following that country's recent earthquake and subsequent nuclear disaster will also help lift the global market.

Much of the lift, however, will be felt on the local level rather than globally, said the biannual report, "This Year, Next Year."

"Spending growth in 2012 will be driven primarily by local media where we expect $2.5 to $3 billion dollars in political campaign advertising and advocacy initiatives, said Rino Scanzoni, GroupM's chief investment officer, in a press release. "National media will see a slowing in growth as the economy continues to face head winds."

The expected 6.4 percent increase is an improvement over GroupM's prediction for 2011. For the current year, the report predicts a 5 percent increase over 2010, which would bring global ad spend to $490 billion. Spending in 2010 was $467 billion.

Increases will be even more modest in the U.S. The report predicted a rise of just 4 percent stateside, to $153 billion.

 

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ABOUT THE AUTHOR

Douglas Quenqua is a journalist based in Brooklyn, NY who writes about culture and technology. His work has appeared in The New York Times, Wired, The New York Observer, and Fortune.

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