ZenithOptimedia Raises Internet Forecast

ZenithOptimedia upgraded its outlook for Internet advertising on a global scale, saying it now expects the medium to hold a 4.3 percent market share in 2005, as compared to the 4.1 percent share it predicted in July. The company also increased its total global ad spend forecast.

ZenithOptimedia’s long-range forecast finds the Internet garnering a 5 percent share of ad spend by 2007, which is an increase from the 4.7 percent estimate given in July.

Advertising worldwide across all channels is on track to reach $406 billion this year, upgraded from almost $405 billion forecast in the July report. The new figure represents an expected 5.2 percent growth rate over last year. North America, which is projected to reach $174 billion of the worldwide take this year, was downgraded slightly in the media company’s projections. The June report said the region would see 3.8 percent growth over last year, while the adjustment in the Q3 results indicates North America will see just 3.6 percent growth.

The Internet’s market share growth over the next several years won’t come at the expense of TV. Television will hold a 37.1 percent share worldwide in 2005, the media company says, and it will hold steady at 37.2 for the next two years. Losing share will be newspapers, which are expected to drop from a 30.3 percent share in 2005 to a 29.8 percent share in 2007. Also expected to suffer is radio, which will go from 8.5 percent of spend in 2005 to 8.1 percent in 2007. Cinema and outdoor, the report predicts, will hold relatively steady.

The nations with the highest growth rates are the “BRIC” countries — Brazil, Russia, India, and China. The group will drive 27 percent of world ad growth for the year.

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