GroupM’s latest Canadian and global ad spend forecast released

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. […]

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.

Brands Articles

Grey Canada gets a shot at Tequila Herradura

Brown-Forman brand awards digital CRM and below-the-line duties to WPP shop

Metro pairs fashion with food

Grocer partners with fashion magazine Flare on food-focused marketing campaign

Activia kicks off campaign with world record attempt

Yogurt brand positions itself as a "lifestyle partner" through Rogers Media partnership

HBO Canada gives fans a chance to sit on the Iron Throne

Selection of Game of Thrones products available at Toronto pop-up shop

Frank & Oak push pop-up competition in the U.S.

Montreal-based retailer is giving consumers the power to pick temporary locations

How to create an engaging flyer

Expert Patrick Rodmell shares five best practices that apply to all retail sectors

What the Heinz-Kraft merger could mean for Canada

Experts say deal will likely lead to layoffs as the two companies find ways to share costs

N.L. college picks Target Marketing to steer branding

Campaign for College of the North Atlantic expected to launch this summer

Metro gets personal with latest digital play

Grocer offers personalized deals through mobile app and website