Blame it on natural disasters in Japan and political upheaval in the Middle East: Group M has revised down its forecast for 2011 ad growth to 4.8% from 5.8%. Advertisers’ measured media spend is now set at $506 billion for the year, compared to $483 billion in 2010.
The study was released by Group M Futures Director Adam Smith in London and GroupM Chief Investment Officer Rino Scanzoni in New York. Spending in 2012 is expected to reach as much as $540.3 billion, a 6.8% increase over 2011. GroupM predicts the ad market will rise from next year’s summer Olympics and the 2012 U.S. political campaigns and elections.
In the US, 2011 spending is expected to reach $148 billion, a 3.8% increase over 2010. 2012 US ad spending should reach $154 billion, up 4.2%.
“Without the election, U.S. ad growth in 2012 would probably be slower than what we are predicting for 2011,” said Scanzoni. “The elections make heavy use of local TV and radio, so national media may well find 2012 is slower-going in any case. As for the summer Olympics, the broadcasts will attract substantial advertising investment, but the majority of this will be displaced rather than new funds.”
“It’s highly unusual for natural disasters to measurably impact the totality of global advertising,” said Smith. “However, the earthquake and subsequent tsunami in Japan was of this rare scale.”
GroupM’s 2011 forecast for Japan dropped from an anticipated 3% growth to a 5% decrease, a difference of $4 billion, or 0.8% of global spending. Smith also said that unrest in the Middle East caused ad spend in the region to lose an estimated $1.2 billion in 2011: “We now expect advertising investment in the Middle East and Africa to grow only 2.5% in 2011 (to $16.5 billion), half the rate it achieved even in the global recession of 2009. We further expect its potential annual growth rate to be reduced to around 7% annually for a few years instead of its typically exuberant double-digit performance.”
The report also predicted that measured digital advertising will account for 17% of global advertising in 2011, a full point ahead of GroupM’s previous forecast in 12/10. The sector is growing at an estimated 15-16% annually and will exceed $100 billion worldwide in 2012.
| Media USD m, current prices | |||
|
2010
|
2011f
|
2012f
|
|
| NORTH AMERICA |
155,660
|
161,831
|
168,308
|
| yoy % |
2.2
|
4.0
|
4.0
|
| Of which USA |
142,517
|
147,897
|
154,101
|
| yoy % |
1.2
|
3.8
|
4.2
|
| LATIN AMERICA |
30,032
|
33,436
|
38,006
|
| yoy % |
15.8
|
11.3
|
13.7
|
| WESTERN EUROPE |
113,525
|
115,010
|
118,367
|
| yoy % |
4.8
|
1.3
|
2.9
|
| CENTRAL & EASTERN EUROPE |
19,547
|
21,947
|
24,786
|
| yoy % |
13.9
|
12.3
|
12.9
|
| ASIA-PACIFIC (all) |
147,799
|
157,031
|
173,133
|
| yoy % |
9.3
|
6.2
|
10.3
|
| NORTH ASIA |
60,479
|
67,686
|
77,543
|
| yoy % |
15.4
|
11.9
|
14.6
|
| Of which China |
46,534
|
52,772
|
61,730
|
| yoy % |
14.5
|
13.4
|
17.0
|
| ASEAN |
14,993
|
17,597
|
20,905
|
| yoy % |
21.8
|
17.4
|
18.8
|
| MIDDLE EAST & AFRICA |
16,106
|
16,503
|
17,650
|
| yoy % |
12.0
|
2.5
|
7.0
|
| WORLD |
482,669
|
505,758
|
540,250
|
| yoy % |
6.5
|
4.8
|
6.8
|
| Media yoy% adjusted for CPI | |||
|
2010
|
2011f
|
2012f
|
|
| WORLD |
3.8
|
1.2
|
3.9
|
