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Internet, Emerging Economies to Drive Worldwide Advertising Growth in 2011

Worldwide advertising spending will continue to recover next year, led by expanded Internet marketing and outlays in emerging economies, according to researchers ZenithOptimedia Group Ltd. and Magna Global.


Worldwide advertising spending will continue to recover next year, led by expanded Internet marketing and outlays in emerging economies, according to researchers ZenithOptimedia Group Ltd. and Magna Global.

Spending will increase 4.6 percent next year, after “surprisingly strong” 4.9 percent growth in 2010, said ZenithOptimedia, a media buying company owned by Publicis Groupe SA. Magna, which tracks ad sales not spending, projects 5.4 percent growth in 2011, following a 6.9 percent gain this year.

Web advertising is growing three times faster than the market as a whole, according to ZenithOptimedia. China will become the third-largest ad market behind the U.S. and Japan next year. While spending is recovering after the 2008 financial crisis, advertising growth is short of the “long-term trend rate of 6 percent,” London-based ZenithOptimedia said.

“The key result of this update is the continued rise of developing markets and digital media, and their central role in driving global growth,” ZenithOptimedia Chief Executive Officer Steve Kingsaid in the report.

Worldwide outlays won’t exceed the 2008 peak until 2012, ZenithOptimedia said in its report. High debt in the developed world, U.S. unemployment and default concerns in the Eurozone pose risks to growth, the company said.

ZenithOptimedia predicts growth of 5.2 percent in 2012 and 2013. Worldwide ad spending will total $449.7 billion this year, the company said.

Web spending will rise from 14 percent of the market in 2010 to 18 percent in 2013, fueled by video and social media, ZenithOptimedia said. Newspaper and magazine outlays will shrink 2 percent. TV remains the dominant medium and will expand its share to 42 percent by 2013 from 41 percent this year.

Web Marketing

Growth in Internet outlays may be even larger given Web- related “activities that do not count as ad expenditure in the traditional sense,” King said in the report.

With ad spending growth of 51 percent projected for the next two years, China will overtake Germany as the world’s third-largest ad market in 2011, ZenithOptimedia said. Asia Pacific spending will rise 23 percent, the company said.

Expenditures in Latin America are projected to grow 26 percent from 2010 to 2013, while North America will increase 9 percent and Japan 5 percent during the same period, according to ZenithOptimedia. Outlays in central and Eastern Europe will increase 31 percent.

Magna, owned by Interpublic Group of Cos., estimates advertising sales worldwide will increase 5.4 percent to $412 billion next year and top the firm’s prior growth estimate of 4.2 percent with Argentina, India and China leading the way.

The ad market recovered more quickly this year than anticipated, with projected 6.9 percent growth outpacing the firm’s 5.6 percent estimate.

Online advertising will overtake newspapers as the world’s second-largest ad medium behind TV by 2013, New York-based Magna said. Internet ad revenue may reach $117 billion by 2016, according to Magna’s report.

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