Global spending forecast gets downgraded, but digital still surging
GroupM has downgraded its global advertising spending forecasts but predicts that growth in digital ad spend will be stronger than anticipated.
In its biannual report “This Year, Next Year,” released Thursday morning, GroupM forecasts a 5.1% increase in measured media spending to $506.3 billion in 2012. That’s down from a 6.3% increase predicted late last year. The reported cited economic uncertainty in both Europe and the U.S. as the reason for the drop.
Meanwhile, growth in digital spend is expected to increase 18% in 2012 to $99 billion, compared to a previous 16% forecast. For 2013, the 70-country report forecasts a 22% hike for digital spending.
GroupM Futures director Adam Smith said in a release that all digital spending trends are positive everywhere irrespective of local economic conditions.
“Internet advertising is growing in every country, so powerful is its structural and evolutionary development,” Smith said.
The report also noted that 2011 advertising spending reached $482 billion, a 5% increase over 2010 spending ($459 billion).
Looking ahead to 2013, GroupM expects global ad spending to increase 5.3% compared to this year, reaching $533.2 billion.
Television accounted for 43% of global ad spending in 2011 – a record high. Smith said the figure might represent a peak for TV ad spend because “the continued development of internet advertising, notably video, will now possibly nip at TV’s nominal share, though some internet video investment will simply return to different pockets of the same TV vendors.”
Meanwhile, print newspapers’ share of advertising hit a new low of 17% in 2011 and is expected to drop another percentage point both in 2012 and 2013.
The GroupM Forecast for Canada
• Total media ad spend in 2012 is expected to climb 3.9% to $13.37 billion, up from $12.87 in 2011
• Digital advertising spend is forecast to jump 10% in 2012 to $2.58 billion, up from the $2.36 billion spent in 2011
• TV spending is projected to increase 4% to $3.9 billion, up from $3.76 billion
• Spending on newspapers is expected to reach $3.81 billion in 2012, up from $3.76 billion the previous year
• After spending $1.63 billion on radio advertising in 2011, advertisers are expected to spend $1.68 billion this year, a 2.9% increase. The report noted that radio continues to be a strong medium in major Canadian markets, but further consolidation (e.g. Bell’s acquisition of Astral Media) is expected to lead to additional cost pressures
• Consumer magazines will see their ad spend increase by 1.1% to $561 million, while business magazines will experience a slight decline, bringing in $320 million in ad dollars in 2012 compared to $318 million last year
• Procter & Gamble reigns as Canada’s biggest advertiser, spending $200 million in 2011 (down from $209 million in 2010). GM was in second place, spending $143 million (-7%), followed by Rogers Communications ($125 million, -2%), the Government of Canada ($109 million, -13%) and Bell ($101 million, -11%). At number 18 on the list, Chrysler Canada had the biggest increase in ad spend with $64 million spent in 2011, compared to $50 million the previous year
For the U.S. market, the report predicted 3.6% growth in advertising spend in 2012, for a total of $152.5 billion, down from 4% growth projected in a previous forecast. The decline was attributed to a number of factors, including the loss of economic momentum and political and fiscal uncertainty.
The “This Year, Next Year” study is part of a GroupM forecasting series on media and marketing. Results are compiled from data from GroupM parent company WPP and its worldwide resources in advertising, market research, PR and specialist communications.