Report: Online Booms as Advertising Overall Slumps
ADOTAS – Advertising in general in the North America and Europe is on the wane, but smart companies will take advantage of the coming boom in developing ad markets and the long-standing boom in online advertising, ZenithOptimedia reports.
In its first forecast of the year, Zenith upgraded its forecast for interactive advertisers, saying it will account for 12.3% of the ad market this year, up from 11.5%.
• Zenith once again substantially increased its forecasts for Internet advertising:
o Internet ad expenditure by 2010 is forecast to reach $67 billion (up from $61 billion in the previous forecast) and account for 12.3% of the ad market (up from 11.5%).
o Online video and local search are now generating substantial new revenues; in the slightly longer term, behavioral targeting on social-networking sites is expected to provide fruitful opportunities to advertisers.
• Some of the Internet’s growth is coming at the expense of newspapers:
o Newspapers are forecast to grow only 4% over the forecast period. After adjusting for inflation, this equates to a 5% decline in expenditure.
o Advertising on newspapers’ websites is included in internet advertising and is helping newspaper publishers claw back some of their lost revenue.
• Cinema and outdoor are the only media apart from the Internet to be gaining market share:
o Cinema is growing rapidly in the US, where it is still quite new, and is benefiting from the spread of digital distribution technology, which is reducing production costs and allows advertisers to run time-sensitive campaigns and target local areas more easily.
o Digital technology is likewise enhancing the value of outdoor to advertisers, as is contractors’ investment in research and improvement of non-digital displays.
Zenith downgraded its combined growth forecasts for North America and Western Europe to 3.8% from 4.4%, blaming the credit crunch and ebbing consumer and business confidence for the slowdown. But Zenith upgraded its forecasts for the rest of the world to 11.1% from 10.9%.
Other key highlights from Zenith’s report:
• Developing market dynamism will maintain global ad growth above 10-year average despite sluggish growth in the developed world.
• Developing markets will contribute 63% of ad expenditure growth between 2007 and 2010, and increase their share of the global ad market from 27% to 33%.
• Asia Pacific will overtake Western Europe in 2010 to become second-largest ad market.
• Internet will account for 9.7% of world ad expenditure this year and 12.3% in 2010
Zenith’s Top 10 contributors to global adspend growth from 2007 to 2010:
Country Growth (US$million) Growth (%)
USA 14, 812 8.3
China 9,242 61.5
Russia 8,248 92.1
U.K. 4,541 19.5
Brazil 4,520 46.6
India 3,163 52.2
Japan 2,347 5.7
South Korea 2,095 21.6
South Africa 2,095 21.6
Pan Arab 1,987 54.2
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