Online Ad Spending Bucks Miserable Expectations
Global advertising spending is expected to be down this year according to three big ad buyers. The one bright spot continues to be online advertising, which is expected to continue its growth, albeit at a slower pace than seen in previous years.
According to GroupM, a division of WPP, expects worldwide ad spending to drop 4.4 percent in 2009. The biggest decline will happen in emerging Europe, where ad spending is expected to decrease 15.8 percent from 2008, according to the company.
Of the six regions included in GroupM’s report, only Latin America is expected to grow (by 8.2 percent). Western Europe is expected to see a pullback in ad spending of 6.7 percent, North America is expected to see ad spending drop 4.2 percent and Asia-Pacific is expected to see ad spending decline 3.3 percent.
Ad spending in the Middle East/Africa region is expected to decline a modest 0.6 percent, though it had been the fastest growing region in 2008 (20.9 percent) and 2007 (23.1 percent).
In 2008, worldwide ad spending grew 3.0 percent, and in 2007 it grew 6.1 percent, according to GroupM.
Carat Insight, a unit of Aegis, has a gloomier forecast: it expects worldwide ad spending to drop a revised 5.8 percent in 2009 (from a previous expectation of 4.8 percent growth).
The biggest drop will occur in Central and Eastern Europe, according to Carat Insight, where spending will drop 8.2 percent. Western Europe will see a 6.6 percent decline in spending, with Spain set to see the biggest decline (16.5 percent) of all countries.
The U.S. is expected to see a 9.8 percent drop in ad spending, according to Carat Insight.
The company pegged 2008 worldwide ad spending growth at a revised 1.0 percent and expects ad spending to grow 0.7 percent in 2010.
The picture gets even bleaker if you ask ZenithOptimedia, a unit of Publicis, which expects worldwide ad spending to drop a revised 6.9 percent (from a previous expectation of a 0.2 percent decline) in 2009.
ZenithOptimedia expects Central and Eastern Europe to see the largest drop in spending (13.9 percent) and expects spending in the U.S. to drop 8.7 percent.
Worldwide ad spending grew 1.0 percent in 2008, and 6.7 percent in 2007, according to the company. ZenithOptimedia expects worldwide spending to grow 1.5 percent in 2010, and 4.5 percent in 2011.
However, the company foresees continued growth for Internet ad spending in 2009. This figure is expected to grow 8.6 percent to $54.3 billion this year, from $50.0 billion in 2008. Internet ad spending is also expected to account for 12.1 percent of total global ad spending in 2009.
In 2008, ad spending grew 20.9 percent, according to ZenithOptimedia.
The company expects Internet ad spending to grow 11.3 percent to $60.4 billion in 2010.
While online advertising’s appeal rests mostly with the medium’s mostly trackable results and spending, Google saw its revenue (which comes almost exclusively from its search advertising business) drop 3 percent from the fourth quarter.
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http://www.emarketer.com/Article.aspx?R=1007049
