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Web Putting the Brakes on Total Ad Spending

Written on: Jan 9, 2007
Author: Sarah Novotny |
: Share; Web Putting the Brakes on Total Ad Spending

According to two different sources, the growth of Internet advertising is putting a damper on the growth of total ad expenditures both globally and in the U.S.

Today, Maurice Levy, chairman of the French advertising conglomerate Publicis, spoke before the French Senate predicting that global ad spending growth will slow dramatically this year. “We are going to experience a considerable change in advertising spending,” he stated. “In 2007, world advertising spending will grow by less than 5 percent and the segment going to the net will increase by 28 percent”

Late last year, the Publicis Groupe took its own dive into digital by announcing the purchase of U.S. digital agency Digitas.

In the U.S., where TV ads for the Super Bowl are selling for a record-breaking $2.6 million, advertisers are seeing the same shift and slowdown in overall growth. According to a TNS Media Intelligence report released yesterday, total U.S. ad spending will rise by only 2.6% in 2007 compared to last year’s growth rate of 3.8%.

TNS CEO Steven Fredericks expects U.S. ad growth to be the weakest in the first half of the year, due to the absence of the Olympics and federal elections, according to Marketwatch.

Both executives blame the slower ad spending growth on shift towards Internet advertising and the low costs associated with it.

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