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The outlook for the global TV advertising market is sluggish growth to 2009 – but with some improvement, particularly online, from 2010 to 2012, as TV audiences continue to fragment and online advertising takes a greater share of marketing budgets, according to research from Screen Digest.

Below, some of the findings released by Screen Digest.

Outlook for 2008/2009

  • 2008 will be a difficult year for TV advertising, with spend growing at a lower rate than the economy: that is, just 1.9% in Europe and 1.5% in the US.
  • However, TV advertising revenues will enjoy a boost from key events that happen only every four years, including the Beijing Olympics, the European football championship and the US elections.
  • Though those events will help avoid a recession for TV ad revenues in ’08 by neutralizing the effect of the slowing economy, their effect will be temporary.
  • By 2009, a fragile advertising environment will have been created, with marketing budgets being slashed, especially in the US:

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“Advertising spending tends to amplify economic cycles – and in some instances it actually anticipates downturns. Although we’re not expecting advertising budgets to be affected this year, thanks to the quadrennial events…we’ll experience the real impact in 2009, which will be the toughest year for advertising revenues,” said Vincent L?tang, Screen Digest Senior Analyst and author of the research.

Outlook to 2012

  • Advertising revenues will grow below average GDP growth between 2008-2012, with annual growth rates of 3.6% in Europe and 3.7% in the US.
  • The growth rate in 2011-2012 will be higher – at 5% in Europe and 6% in the US – as the economy picks up after 2008/2009.
  • Most of that growth will come from online advertising, which is expected to grow on average 17% every year until 2012.

“Whilst the overall picture for ad revenues is flat or in decline, two areas will enjoy growth – online will continue to grow at a pace, buoyed up by a strong search advertising market and digital TV channels will be taking a larger proportion of ad budgets by 2012, at the expense of the traditional broadcasters,” said L?tang.

Ad budgets to remain unchanged, but more to be spent online

  • By 2012, advertising will be a three-tier market, with online at the top, TV in the middle and other traditional media bringing up the rear.
  • Online advertising, when both search and display are combined, will have enjoyed double-digit growth every year to 2012.
  • TV advertising will have retained its 2007 market share, but the traditional broadcast channels will have seen their share of the ad budgets slipping; the research contrasts the growth rate of the European traditional channels of up to 2% per year, with the digital channels that are expected to experience advertising growth rates of 20% per annum.
  • Rather than increasing overall spending, companies will cut into their traditional media advertising budgets to divert the money to online and digital TV.
  • As a result, traditional media will suffer a decline in budgets – particularly print and radio, as well as cinema campaigns.
  • Minimizing the impact for outdoor and cinema will be technological advances, in terms of digital signage for outdoor advertising and the introduction of digital screens in cinemas.

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