For Ad Revenues Exceptions Rule The Future

Michael Hedges November 29, 2012 Follow on Twitter

Global ad spending growth is slowing ever still, except where it isn’t. Major advertisers will hold on to their money tighter next year, except where they won’t. Another forecaster sees a less than exciting year ahead, except for digital media.

Global ad spending will grow 4.3% this year and 4.0% next, says the International Ad Forecast from WARC (formerly the World Advertising Research Center), released this week (November 26). The January 2012 WARC forecast predicted 5.4% increase in 2012 ad spending over 2011. A lower growth rate is attributed to “the challenging fiscal climate is still weighing on the industry.”

“The global ad market has been boosted this year by quadrennial events; namely, the Olympics, the US presidential election and, to a lesser extent, Euro 2012,” noted WARC data editor Suzy Young in a statement. “Next year will suggest by comparison, with advertisers having fewer incentives to spend when the underlying mood is generally one of caution.”

The ad people are still excited about the BRICs. In 2013, according to the WARC forecast, ad spending in Russia will rise 14.6% year on year, followed by China at 12.5%, Brazil at 9.5% then India at 9.0%. Regionally, Asia Pacific ad spending will rise most, though hardly a blip (1.0%) in Japan. Ad spending in Europe, Russia notwithstanding, will grow least.

Continuing to power the global ad market, spending for 2013 in the United States is forecast to grow 2.5%, down from 4.1% growth for 2012. American advertisers are projected to spend US$ 153 billion this year, 29.5% of total worldwide ad spending. By contrast, 2012 ad spending in China is expected to be €35 billion, 6.7% of the global output. Fourteen country markets were assessed in the WARC ad report from which a global forecast was derived. 

Repeating the meme of recent years, the WARC forecast says “conditions will remain difficult for print, as newspapers and magazines continue to witness declining advertising sales at the global level” and internet advertising is “expected to enjoy annual growth of around 14%.” Spending on other media, including television, is expected to slightly lag the global growth rate.

Separately, the Online Advertising Forecast from Digital TV Research (November 14) predicts internet ad spending swelling to US$92 billion this year and US$147 billion by 2017. The US market will continue to take 40% of internet ad spending, growing to US$58 billion in 2017. In China internet ad spending will rise to US$ 10.8 billion by 2017 from US$ 2 billion in 2010.

The report sees addressable fixed broadband driving online ad spending. Online advertising per household will increase from US$ 139 in 2010 to US$ 197 in 2017. Mobile advertising, the great hope of many, was not included.

Pushing the limits of crystal ball gazing, US market analyst Cowen & Co predicts mobile ad spending in the US reaching a quarter of digital ad spending by 2018 based on a survey of US advertisers. “Mobile ad (spending) comes at the expense of traditional ad mediums,” said analyst John Blackledge, quoted by deadline.com (November 27), stating the obvious. In contrast to the WARC forecast, Cowen & Co believes US ad spending in all media will grow 4.6% in 2013 with digital advertising 33% of that.

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