Advertising is keeping pace with robust growth in the global economy despite news of debt fatigue, inflation and tighter money, according to GroupM‘s new global ad forecast, titled “This Year, Next Year.”
Global ad revenue is expected to increase 6% in 2007 and 7% in 2008, but growth in the United States is expected to be half of those rates: 2.8% and 3.5%, respectively, according to WPP’s GroupM.
Still, in absolute terms, the US will remain the leading source of new ad dollars in 2007, it said.
Also according to the report:
- So-called Old Europe is expected to grow at a rate of 4% during the forecast period, but New Europe’s growth is expected to be around 20%; led by Russia, the region is generating $19 billion in ad revenues – more than Latin America. Russia is now the world’s No. 12 ad market.
- But the most growth is expected from Asia/Pacific, which is forecast to contribute 30% ad growth this year – and a whopping 38% in 2008 as Olympics-related ad demand flows into regional TV.
The GroupM report includes forecast ad revenues for all main media types and main marketing services: direct marketing, market research, public relations and sponsorship.
Marketing services are growing as fast as internet-assisted media and are almost as large; sponsorship is the fastest-growing outlet, behind the internet, according to “This Year, Next Year.”
Some other highlights from the report:
- Ad revenue’s 6% growth this year will bring the global total to $433 billion; in 2008, the total will be $462 billion (7% growth).
- The US presidential elections are expected to generate a record $1 billion in ad spend.
- The Olympics, too, are likely to add another $1 billion in the US alone, though the event actually deters some price-conscious advertisers from spending money.
- TV is providing about half of world ad revenue growth: 47% in 2007 and 52% in 2008.
- Internet advertising’s share is falling, from 32% in 2006 to an anticipated 30% this year and 28% in 2008.
- However, Internet is still the growth leader, supplying 50-60% of new revenue in the developed world, although daily internet usage and broadband penetration are close to plateauing in some developed countries.
- Sponsorship worldwide will be worth $38 billion in 2007 and $44 billion in 2008 – essentially as large and measured internet, and growing in double digits.
- There is more talk of nontraditional media channels, including branded content, product placement, user-generated media and events – which account for less than 1% of current marketing investment and are not included in the forecast’s growth figures and dollar totals.