GroupM: 2008 US ad spend forecast at 188.6 billion


Ad spending in U.S. measured media is expected to show almost a 4% gain in 2008 compared to the previous year, when spending was up about 3%, according to a new study from GroupM. The forecast is unchanged from the company’s previous projections earlier this year.

The study, “This Year, Next Year,” is part of GroupM’s media and marketingforecasting series drawn from data supplied by WPP.

The report said U.S. ad spend is expected to show a 3.7% increase to 168.6 billion in 2008.  At the same time, spending in 2007 is expected to come in at  2.8% higher than in the previous year. Worldwide spending, meanwhile, is expected to go up 7% to 479 billion in 2008 following an anticipated 6% increase in 2007.

GroupM Futures Director Adam Smith identified television and the internet as the primary engines of global ad growth with 50% and 30%, respectively, of additional  new  investment in 2008. He also said spending on marketing services such as sponsorships and public relations is growing at a faster rate than traditional advertising.

Smith also reported that five percent of global ad investment is expected to shift  from developed  to emerging economies in 2008, the largest such shift ever recorded.The main geographic contributors to growth next year are predicted to be China, with 21% of all new money, and Russia and Brazil with eachcontributing 6%.  India will account for 3% and the U.S. remains the second-highest contributor at 20%.  

The report also predicted the following:Next year’s spending expectations largely reflect the Olympics and theU.S. election. It’s anticipated that the Games will bring 1 billion in ad spend  to  national TV and 200-300 million to local broadcast.  The election is even more important to local broadcast and is expected to inject nearly 2 billion in 2008 before facing a tough adjustment in 2009.

Internet ad spending is expected to exceed 10% of global ad investment  in 2008 for the first time ever, and search will comprise 65-70% measured online advertising in 2008, up from 50% in 2005. 

The Writers Guild of America strike is not expected to impact U.S. ad spend.  It’s anticipated that spending will follow the viewing audience and shift from network to cable and possibly spill over into other media if demand causes inflation in cable. However, a prolonged strike could delay pilots and thus impact the 2008 upfront marketplace. An upfront delay would add to uncertainty and nervousness, but might force broadcasters into innovation with new formats.