GroupM said global ad spend in measured media is expected to exceed $500 billion for the first time ever next year following an economic recovery that also sparked significant ad spending increases in 2010, according to its revised report.
In another first, the report revealed that digital media outlets are challenging newspapers as the world’s number-two preferred medium (behind television) in measured advertising investment.
The 70-country forecast predicted that worldwide ad spending in 2011 will reach almost $502 billion, a 5.8% increase over 2010 spending of $474 billion. In the U.S. 2011 spending is expected to hit $147.7 billion, a 3.7% increase over the $142.5 billion invested in 2010.
The study, “This Year, Next Year,” also reported that worldwide, 2010 ad spend is expected to increase 5.9% over the $448 billion spent in 2009; in the U.S., 2010 spending increased 1.2% over 2009, when almost $141 billion in ad expenditures was reported.
It was released by GroupM Futures Director Adam Smith and GroupM Chief Investment Officer Rino Scanzoni at the UBS Global Media and Communications Conference.
“We’ve seen a significant rebound in advertising spending in the U.S over the last six months,” said Scanzoni. “Television and online media have been the primary beneficiaries of the rebound in spending. In television, the growth is driven by local TV as political advertising—coupled with the resurgence in growth from the retail and auto categories—has risen from the historically depressed levels of 2009.”
He added that moderately accelerated growth is anticipated in 2011 as corporations with significant cash reserves deploy investment in marketing and advertising to drive top-line growth.
Measured global advertising has recovered nearly all the dollars lost in 2009, according to the report, which also said the recovery has been broad-based with spending increases reported in categories including toiletries and cosmetics, automotive, beverages, retail, financial services, entertainment, and food, among others.
Measured internet advertising is expected to contribute 37% of global ad growth in 2011 and is likely to reach $82 billion, a growth rate that suggests it will overtake newspaper spending (forecast at $90 billion in 2011) at some point in 2012.
“Internet spending may indeed already have eclipsed newspapers if one allows that measured internet ad investment does not include substantial advertiser investment in content creation, search-engine optimization and analysis,” commented Smith.
Nations expected to contribute the largest dollar amounts in 2011 ad spending growth are the U.S. and China, each with at least $5 billion, followed by Canada, Russia, Indonesia, India, Brazil and Japan, each expected to add $1 billion-plus in spending growth.
|Media USD m, current prices|
|CENTRAL & EASTERN EUROPE||16,416||18,158||20,220|
|MIDDLE EAST & AFRICA||14,336||15,815||17,514|
RBR-TVBR observation: More signs that we may be coming out of the recession. While unemployment here and abroad remains an issue that would indicate the recession is still going strong, the GroupM forecast shows two consecutive years of adspend growth. If advertising is often the first budgetary item to get cut in down times, it could be said that many companies have seen their bottoming out and now have more money to spend to attract more business.