Digital to Attract 17 Percent of Global Ad Spend in 2011

Online will attract a greater portion of global ad spend this year than previously expected, according to WPP-owned media buying outfit GroupM. The company forecasts measured digital advertising will account for 17 percent of global advertising in 2011, a point ahead of the 16 percent it had previously predicted in December.

In addition, the group estimated the digital ad sector is growing at between 15 and 16 percent annually, and that it will exceed $100 billion in spend, worldwide, by 2012.

“Digital advertising spending accounts for 20 percent and more of measured advertising in countries where it is most developed, but it still has real growth potential even in those nations,” commented GroupM Futures Director Adam Smith, citing the continued use of technologies such as behavioral targeting and video advertising as key drivers for that spend.

In terms of overall media spend, however, GroupM revised its global predictions down to 4.8 percent year-over-year growth, a considerable drop from the 5.8 percent it predicted late last year. The company said world events including the earthquake in Japan and political unrest in the Middle East explained its more conservative outlook.

That overall drop in ad spend could also explain the predicted growth in spending share for digital, with advertisers perhaps cutting back more on traditional channels such as print and out of home in order to retain their digital investments.

The forecast also predicted that ad spending across all channels will reach $540.3 billion in 2012, a 6.8 percent increase over 2011, owing largely to increased spending around the summer Olympics and the 2012 U.S. political campaigns and elections.