The 2006 Advertising Forecasts Are In – The Internet Continues Huge Growth At the Expense of Newspapers and Televsion, and the US and European Percentage Growth Will Lag Far Behind Such Growing Markets As Brazil, Russia, India, Indonesia and China

The 2006 task, therefore, is for the traditional media to ensure it has enough of an Internet presence to capture some of that increased spend.

And according to Zenith Optimedia, as companies are shifting their spend to new platforms they are also investing big-time in market research to measure the impact of those new opportunities. If they like what they see from that research there’s no telling where it could all end.

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Internet Advertising Soars to New Records on Both Sides of the Atlantic and a European Survey Shows Big Companies See Online Advertising As Critical to Their Campaigns
The percentage figures for online advertising increases this year are truly staggering: Yahoo reports a 46% increase in advertising from last year; The UK, Europe’s largest online market, reports 62% growth; in Poland it is 50% and it’s 35% in Belgium, The Netherlands, and Germany; Italy is expected to grow 18% and the list goes on.

Now It’s Confirmed: Some of That Double Digit Internet Advertising Increase Forecast For Each of the Next Five Years Will Come Directly From the Pockets of Newspapers
While mainstream newspapers are bemoaning circulation declines, and trying to get the young more interested, they were at least secure knowing that while the industry’s $47 billion spend hasn’t grown much over the years it is still 40 times more than Internet advertising.

Overall Global Advertising In 2005 Is Forecast Lower, But the Internet Spend Keeps Going Up With Television Feeling the Worst Pinch of Ad Placements Going Elsewhere
The television share of global advertising appears to have peaked at 38% and is now on the way down, led by two of the world’s leading television markets – The US and Japan – according to new report issued by the ZenithOptimedia Group.

European Ad Growth to Slow in 2005
European ad growth is forecast to be a bit less in 2005 than in 2004 with only Germany among the major countries expected to see growth improvement, according to media agency Carat.

Media Buyers Revise Global Advertising Forecasts Upwards for 2005, But Traditional Media Fears Record Internet Ad Spending Will Come at Their Expense
At the end of each year global traditional media powerbrokers meet in New York for two media conferences where they prognosticate about the year ahead. This year it was a mixed bag...

Most of the Who’s Who of advertising forecasts were in New York this week giving presentations, or at least releasing forecasts, for media conferences sponsored by UBS and Credit Suisse/First Boston.

And while there were some differences in the percentage numbers, the analysis was pretty much the same – that the Internet is where the action is and that a lot of companies are diverting funds there from newspapers and television. And the head of Carat Americas says he believes that some major companies now putting about two-thirds of their budget into television will reduce that within the next three years to around 50% with the remainder being spread on new opportunities, particularly Internet broadband.

On the international scene, Steve King, Zenith Optimedia ceo, said he saw global advertising increasing by 5.9% in 2006 – to $427.3 billion -- although he reduced 2005 growth a tad to 4.8% from the previous 5% forecast.

But much of the global strength comes from outside the US and Europe. King noted that Brazil, Russia, India, Indonesia and China together make up about 8% of the world’s advertising spend, yet those countries were responsible for 30% of the growth in 2005.

According to Zenith, the global Internet advertising market -- about $18 billion this year – will grow to nearly $30 billion by 2008, representing about 6.4% of the total advertising spend. And market research – now estimated at $24 billion annually -- is forecast to grow by 11% this year and for each of the next two years. Advertisers are determined to find out where they get the most bang for their buck!

Supporting that same theme, David Verlin, CEO of Carat Americas, said that online now accounts for about 8% of his clients’ advertising budgets, but within three years he expects it to grow to around 15%, at the expense of television spend.

Perhaps the most respected forecaster – because he’s been at it the longest and is usually right – is Bob Coen, director of forecasting at Universal McCann, but this has been a rough year for him. This time last year he predicted that 2005 was going to be a good year with a 6.4% growth, he reduced that in June to 5.7% and now he has substantially dropped it again to 4.6%. Merrill Lynch also reduced its 2005 forecast to 4.6%.

But Coen believes television in particular will pickup in 2006 because of the Winter Olympics (although NBC is said to be still short some $100 million in ad sales for the February Games) and there are also US Congressional races. He looks for a 5.8% spend increase in 2006.

And while everyone was using single digit growth numbers for most advertising mediums – newspapers for instance, forecast to grow 3.5% this year and 3% next year – its all double digit increases for the Internet.

Online ad spending grew by nearly 30% this year and most forecasters see it increasing by at least 25% in 2006. For newspapers, the trick is to ensure they enjoy some of that increased spending on their web sites that nearly 40% of Internet users visit.

Newspapers now get around 5% of their total ad revenue from the Internet, but with the Internet spend forecast to grow as it is, and newspaper web sites for now, at least, very popular, then that 5% could become around 15% before not too long.

North America is still the world’s largest ad market with the 2005 spend forecast by Zenith to be $173.3 billion, followed by Europe, $108.1 billion; Asia Pacific, $82.3 billion; Latin America, $18.2 billion; and Africa, the Middle East and the rest of the world, $21.4 billion.