With a huge chunk of the globe’s ad spending moving beyond ‘the West’ to fast-developing regions like BRIC nations (Brazil, Russia, India and China), marketers and agencies should cast their gaze afar when planning for growth over the coming years.
Consider this: total ad spending in emerging markets is expected to pass that in the U.S. in 2014.
China, the biggest of BRIC, surged past Germany to become the third-largest ad market in 2010, according to Publicis Groupe’s ZenithOptimedia. China major-media ad spending is on track to overtake No. 2 Japan in 2015.
The other BRICs are also rising. This year, Brazil was No. 6, while Russia came in No. 11 and India was No. 16, according to ZenithOptimedia.
In a list of up-and-comers known as MIST, Mexico ranked No. 15; Indonesia, 17; South Korea, 12; and Turkey, 24.
“Emerging markets are the main source of ad-expenditure growth,” said Jonathan Barnard, head of forecasting at ZenithOptimedia. “Over the next three years, half of all global growth in ad expenditure will come from just 10 markets: the BRICs, the MISTs, South Africa and Argentina.”
The 25 largest ad markets this year include 10 emerging ones: BRIC, MIST, South Africa (No. 14) and Thailand (No. 22), according to the tally by ZenithOptimedia. Argentina ranked No. 26.
Among the 100 largest global advertisers, 13 companies allocated more than 10% of 2010 measured-media spending to China, according to Ad Age‘s Global Marketers report.
That China-focused group includes powerhouses of personal care (Procter & Gamble, L’Oreal, Colgate-Palmolive), food and beverage (Coca-Cola., Mars, PepsiCo) and luxury and alcohol (Estee Lauder, LVMH Moet Hennessy Louis Vuitton, Pernod Ricard, Chanel).
One global advertiser stands out in China: Yum Brands, parent of KFC. China accounted for 29% of the fast-food company’s measured-media ad spending and 36% of its worldwide revenue last year.
P&G generated about $5 billion (6% of revenue) from Greater China in the year ended June 2011 and is counting on big growth ahead.
“The average Chinese spends less than $3 a year on Procter & Gamble products,” Chairman-CEO Bob McDonald told analysts in August. “But in the United States, the average [person] spends nearly $100. So while we’re leading, while we’re growing – we’re growing strong double digits (in China) – we still have work to do.”
Meanwhile, P&G’s revenue in India and Brazil is growing even faster, with an annual growth rate above 20%.
Avon Products is the Global 100’s most BRIC-centric advertiser, putting nearly 40% of 2010 measured-ad spending into those countries.
Brazil passed the U.S. last year as the beauty-product company’s biggest single market. Russia also is a key Avon market.
Spending among the leaders in 2010 was on a growth trajectory – a shift from 2009, when top-100 worldwide spending tumbled 8.7% amid the global recession.
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