The same forces that will drive down ad spending among North American and European marketers in the coming years will also spur an uptick in global ad spending online, according to a revised ad forecast released yesterday by ZenithOptimedia.
The Publicis-owned media agency released the revised ad forecast after concluding that the credit crisis would likely stunt ad spending in sectors beyond those most commonly affected, such as housing and automobile sales. The new forecast lowers the projected North American growth for all ad spending in 2008 from 3.7 percent to 3.5 percent, and from 3.9 percent to 3.7 percent for Western Europe.
“The credit crunch continues to worry investors, consumers and advertisers in Western markets, so we have downgraded our forecasts for ad expenditure growth in 2008,” reads the forecast. “However, we have upgraded our forecasts for both regions in 2009 and 2010 in the light of stronger than expected growth in Internet advertising.” The forecast also cites high commodity and energy prices as barriers to growth.
Those same economic conditions will likely fuel an expansion among Internet advertising. Because marketers are being careful with their advertising dollars, they are eager to invest in less expensive media that is more easily trackable, according to Zenith.
“Faced with an uncertain economic future, Western advertisers are shifting even more of their budgets online, where the returns on their investment are obvious, and easy to quantify and fine tune,” reads the report. “The quantity and quality of online video is improving all the time, and online audiences for full-length films and television programs — and the ads that surround them — are growing rapidly.”
Zenith’s original forecast, made in March, said the Internet would account for 9.7 percent of global ad spending this year, for a total of $47.5 billion, and 12.3 percent in 2010, or $66.9 billion.
In the new forecast, Zenith predicts that online spending will exceed 10 percent of all advertising in 2008, for a total of $52.2 billion, and in 2010 account for 13.6 percent, or $78.2 billion. The media agency didn’t break out specific media, such as the Internet, by region.
Zenith’s Internet ad spending projections contrast somewhat with other recent reports. Earlier this month, the Interactive Advertising Bureau reported that while spending for the three-month period ended March 31, 2008 increased compared to the same period in 2007, the total was lower than the three-month period ended Dec. 31, 2007. A June report from TNS Media Intelligence also showed that display ad spending had begun to slide in Q1 of 2008.
Zenith’s revised forecast carries bad news for print media and radio, but saves the worst for newspapers. “Newspapers, magazines, television and radio are all losing share to the internet, but newspapers are clearly suffering the most,” it reads. Newspapers have been steadily declining in share since 2006, when it claimed 28.4 percent of global ad spend. By 2010 that number is expected to reach 23.7 percent.
The forecast offered good news for outdoor media, however, calling it “the only other medium to be gaining market share. The medium is expected to increase its share of the global ad market from 6.4 percent in 2008 to 6.7 percent in 2010.
The updated forecast puts total ad spending in North America this year at $195 billion and $124 billion in Western Europe, combined representing about 60 percent of total global ad spending.
While ad fraud has become part of every marketer’s vocabulary, attribution fraud—the practice of gaming outdated attribution models to justify self-serving means—has ... read more
On Monday, Netflix reported that it added 370,000 new subscribers in the U.S. in the third quarter, 20% more than the 300,000 it ... read more
Snapchat Discover has been a hit with publishers that want access to the popular messaging app’s highly-desirable audience, and some reports even ... read more
Little more than a year ago, Facebook CEO Mark Zuckerberg streamed the first live video from Facebook headquarters. In April of this ... read more