Firm boosts this year's advertising forecasts

AP News
Posted: Oct 18, 2010 1:20 PM
Firm boosts this year's advertising forecasts

Advertising spending around the world will grow faster this year than expected in every region, including the U.S., a research firm said Monday as it raised estimates.

ZenithOptimedia said it now expects global ad spending to grow 4.8 percent this year to $449.49 billion. That's up from its prior estimate of 3.5 percent growth.

The firm said the advertising world saw a surge in midyear advertising, helping offset a downturn brought on by the weak economy in the past few years.

This marks the firm's fourth consecutive upgrade, after six straight downgrades.

Although the global market will grow, it will still be down some 6.3 percent from $479.49 billion in 2008, when the downturn started.

In the U.S., the firm expects total advertising spending to increase by 2.2 percent to $151.5 billion this year, up from a prior forecast of 1.1 percent. That's off 11 percent from 2008's total spending of $170.22 billion.

The firm also boosted its forecast for global spending in 2011 to 4.6 percent growth from 4.5 percent.

The U.S. will keep growing at a faster pace, the firm said, predicting growth of 2.4 percent in 2011 and 2.9 percent in 2012.

Looking at growth across the regions, Latin America had the most dramatic revision because of huge advertising spending increases in Brazil. Advertising growth in Latin America this year is expected to be 16.8 percent, up from 7 percent previously. Brazil's advertising spending should be up 26 percent his year.

Western Europe's projected growth this year is now 3 percent, up from 2.2 percent.

Advertisers around the world continue to move away from newspapers, opting instead for television and the Internet, to keep up with people's shifting habits. In the U.S., newspaper advertising spending is expected to drop 10 percent this year, and 7 percent in 2011 and 2012.

Internet advertising will grow 13.5 percent this year, ZenithOptimedia said, and by 15.5 percent in 2012.

Newspapers will make up 21.3 percent of total advertising spending this year, and drop down to 20.2 percent next year. Internet advertising, meanwhile, will have a 13.9 percent share this year, and jump to 15.1 percent next year.

But magazine ad spending will see an uptick this year. ZenithOptimedia now expects 2 percent growth in this sector this year, a reversal of the 1 percent decline it predicted in July. The firm said more publishers are going to digital versions on new products such as Apple's iPad, and people are buying subscriptions there.