Global Advertising on Upswing

Global ad spending is expected to grow at a 5.9 percent compound annual growth rate (CAGR) from now until 2009, with online ad spending projected to grow at a 15.8 percent CAGR over the same period. That’s according to the latest Global Entertainment and Media Outlook released by PricewaterhouseCoopers today.

Overall ad spending is forecast to grow from $358 billion in 2004 to $477 billion in 2009. TV advertising is expected to grow more slowly than online, at a 6.4 percent CAGR during the period. However, it remains the largest advertising medium by far and will make up more than half of the overall spend in 2009 at $186 billion. Digital TV will add to the number of outlets and fuel multichannel advertising, which will be the principal driver of growth in this area, the study finds.

The faster-growing Internet ad space is expected to end up at $32 billion globally in 2009, fueled by an expanding broadband subscriber base and ad formats geared to broadband, such as keyword search and full-motion video.

PricewaterhouseCoopers finds the global entertainment and media industry to be in its strongest position since 2000. The report looks at 14 industry segments, including recorded music, filmed entertainment, Internet access and advertising, TV networks and distribution, video games, and eight smaller segments.

“The entertainment and media industry continues to display an extraordinary ability to reinvent itself and create new revenue streams through innovative offerings that barely existed as recently as 2000,” Wayne Jackson, global leader of PricewaterhouseCoopers’ Entertainment & Media Practice, said in a statement.

Spending across all segments is predicted to increase at a 7.3 percent CAGR to $1.8 trillion in 2009. Improved economic conditions, an advertising upswing, and expanding online distribution of media will be key drivers triggering spending.

New revenue streams led by broadband Internet and wireless technologies are expected to account for a significant portion of total growth in global spending. Total revenue from new spending streams are predicted to increase from $11.4 billion in 2004 to nearly $73 billion worldwide by 2009.

“Online and wireless video games, online film rental subscriptions, licensed digital distribution of music, and the rapid adoption of ring tones and mobile music downloads are becoming critical components of the industry and driving significant revenues across all regions,” Jackson said.

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