'Mild recovery' seen in global ad market
Issuing the verdict, ZenithOptimedia said the market’s return to growth would be aided by the Winter Olympics, the FIFA World Cup and the US mid-term elections.
The media agency said that, although the first quarter was worse than expected, the trio of events would help boost spending on ads next year by 1.6% to $464billion.
It said that the growth, albeit marginal, was achievable because initial predictions of steep revenue decline for agencies and media owners have not rung true in all sectors.
Moreover every sector, including the hardest hit ones like financial services, now has a clearer and more predictable outlook, as the downturn’s end appears to be in sight.
But before British advertisers return to the popping of champagne corks, it should be noted that Zenith says that the UK will not recover next year.
If the firm is right, the advertising market for the UK will stagnate in 2010, and decline in the US for the third year in a row, just as 62 rival nations report growth.
Explaining its findings, Zenith said that those regions, like Western Europe, “that went into the ad downturn first will suffer the most and come out of it last.”
Serving to underline the threat to Britain, the firm said China would overtake the UK this year to become the fourth-largest ad market, behind Germany, Japan and the US.
Like 25 other national advertising markets, China is the heavyweight due to defy the downward trend in ad revenues this year, which are set to fall 8.5%, alongside India.
In contrast, Finland, Greece, the Netherlands, Norway and Taiwan will be the only five markets tracked by Zenith which will fail to grow anytime before 2012.
More positively, the internet provided the one indisputable bright spot for the advertising market this year, explaining why its growth forecast is up from 8.6% to 10.1%.
“Its familiar virtues of transparency, accountability and flexibility have proved even more attractive in a recession than ever,” Zenith said.
By 2011, the internet will account for 15.1% of all ad expenditure, up from 10.5% in 2008, mostly thanks to the growth of paid search advertising.
The firm added that Microsoft’s launch of its new search engine – Bing – “provides welcome competition to Google” and “should spur further innovation in search.”
Editorial image courtesy of Jolante
8th July 2009