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Ad spending up 69%…in Oman. ZenithOptimedia revises forecasts

Global media buyer ZenithOptimedia released revised ad spending forecasts this week. For Western Europe and North America ad spending, they say, will be lower than the previous forecast. But 2009 and 2010 will be better…they say.

Oman Mountain Dew adAd spending in Western Europe will grow 3.7% this year, rather than 3.9%, and spending in North American will slow to 3.5%, rather than 3.7%. For the rest of the world, the forecast was revised up, to 11.8% growth from 11.1%. Global ad spending forecast for 2008 was revised up to 6.6% from 6.5%, well ahead of the ten year 5.2% average. The previous report was released in March.

Latin America is forecast for 17.5% growth in spending, closely followed by Central and Eastern Europe at 17.4%. Latin America, Central and Eastern Europe, Asia-Pacific and the Middle East will contribute 63% to ad growth by 2010.

“Internet ad growth continues to run ahead of expectations,” said the report. “Faced with an uncertain economic future, Western advertisers are shifting even more of their budgets online, where the returns on their investment are obvious, and easy to quantify and fine tune. Internet ads are cheap, easy to target and to customize for particular audiences.”

Internet advertising is expected to break the 10% level this year… rather than 2009 as predicted last quarter. Print and broadcasting will continue to lose ad share to the internet, print hurt most, says the report, because “news websites offer more timely coverage and instant reaction, and… classified advertising works better online than offline.”

Add together the ad spending forecasts, consumer spending forecasts and economic growth forecasts, not to forget the speed of broadband internet growth, and the picture is one of global growth fueled by high consumer demand in developing regions more than offsetting economic downturns in North America and Western Europe. Those downturns are causing ad buyers to look for every efficiency, driving more ad money to specialized web vehicles and paid search ads, not to forget outdoor advertising, the only other medium gaining market share. But the ad people are also quickly taking those same efficiencies to developing regions.

For ad people the business horizon is three to five years. That reflects the normal retail business development cycle. Fifteen years ago – yes, a generation half-life – media deriving its support from advertising was completely in sync. Things changed. Print media in “developed” regions is suffering most, though not in developing regions. Traditional TV will be next and it will probably disappear. But as online ad spending overtakes newspaper and TV spending in the mid-term, limits will appear. The ad people will continue to follow the (consumer) money. Media people need to rethink following the followers.

 

 


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