Earthquake recovery and football play into 2012 ad spend
According to a newly revised forecast from GroupM, global ad spending will reach $522 billion in 2012 – a 6.4% increase from 2011.
While that 6.4% is positive as a standalone figure, it’s actually a bit lower than the 6.8% (or $540.3 billion) increase GroupM forecasted in a July report.
A GroupM spokesperson said the downgraded expectations were “due to a wide range of economic indicators and reports that we receive from GroupM and WPP companies around the world.”
On the other hand, it is still welcome news after the WPP-owned company downgraded its 2011 ad spend predictions to 4.8% growth from 5.8% in the July report. At the time, natural disasters and political upheaval were behind the downgrading.
GroupM’s report – the biannual This Year, Next Year, which covers spending in 70 countries – points to a “vigorous” advertising recovery in Japan after the country battled major natural disasters. It also cites an estimated 1% of incremental growth in 2012 could be attributed to the ‘quadrennial effect’ of the U.S. elections, European football and the Olympics.
Adam Smith, GroupM futures director, said in a release that “Japan’s advertising recovery has proved substantially more vigorous and resilient than we forecast in our mid-year report.”
The new study, released Monday at the UBS Global Media and Communications Conference in New York, estimates that 2011 ad spending in measured media would reach $490 billion globally. That’s an increase of 5% over spending of $467 billion in 2010.
Here are some of the GroupM’s predictions on digital spending:
• global digital ad spending is expected to reach $84.7 billion in 2011, a 16% increase over 2010
• in 2012, global digital ad spending is expected to hit $98.2 billion, a 16% jump
• measured digital media investment is predicted to provide 43% of the global dollar growth in 2012
• digital is expected to comprise 22% of all measured ad investment in mature western economies in 2012, and 12% in the faster-growing world
• the predicted digital growth rates in 2012 are 11% in mature western economies, and 37% in the faster-growing world
• global ad spending on paid inventory in social media is estimated to be approximately $5 billion in 2011, or approximately 6% of measured online ad investment. This could double to $10 billion within two years.
Canada-specific results will be available when the full report is published in the coming weeks.
Rino Scanzoni, GroupM’s chief investment officer, said “Spending growth in 2012 will be driven primarily by local media where we expect $2.5 to $3 billion dollars in political campaign advertising and advocacy initiatives. National media will see a slowing in growth as the economy continues to face head winds.”
This Year, Next Year is part of a forecasting series on media and marketing. Results are compiled from data from WPP and its worldwide resources in advertising, market research, PR and specialist communications.
For more on GroupM’s forecasting and a look at ZenithOptimedia’s 2012 outlook, read “Forecasts for 2012 Ad Spending Revised Downward” in Advertising Age.
