Carat on Wednesday said it forecast 6.4% growth in global ad spending in 2008, and did not revise its forecast of 5.8% for 2007, only slightly less than the 5.9% growth in 2006. Carat is Europe’s biggest media-buying firm and a unit of Britain’s Aegis.
In 2008, the Beijing Olympics will drive further acceleration in growth rates in the USA and Asia-Pacific to 5.6% and 9.3%, respectively, with the US market receiving a boost from the presidential election, Carat said.
Online – the single biggest driver of ad spend growth in every region and country – “will continue to outgrow the rest of the industry by some margin, but we would also expect to see increasing impacts from new hardware and technologies, including 3G, HD radio and multi-casting and IPTV and other forms of interactive broadcasting,” according to Carat.
Globally, after digital, the next two fastest-growing media are out-of-home and cinema, while in publishing newspapers are usually the slowest growing segment, with free titles generally taking advertising share and magazines outperforming newspapers in the majority of markets, according to the forecast.
Regional ad spend breakdown according to Carat:
- US ad spend is forecast to improve slightly from 4.9% in 2006 to 5.1% in 2007.
- Western Europe is projected to fall back slightly from 4.4% in 2006 to 4.1% in 2007
- 2006’s good growth in France (4.8%) and Spain (4.6%) will moderate to 3.1% and 4.0% respectively.
- Asia-Pacific ad spend will continue to grow, rising from 7.3% in 2006 to 7.8% this year, with the major contributor the continuing dynamism of the consumer economy in China.
- The US, still accounting for nearly half of global ad spend, is expected to remain a steady grower at 5.1% this year (previous forecast, 5.2%).
- Online media remains the fastest-growing, and internet services are approaching 8% of spend; with US households spending approximately 15% of their media time online, there remains further headroom for rapid expansion.
- US cinema will produce strong double-digit growth, today accounting for less than 1% of total advertising expenditure; however, the dual appeal of longer formats and a captive audience is becoming increasingly attractive to advertisers.
- Despite a quiet year for sports and US politics, respectable growth in US television ad spend is expected, around 4.0%, ahead of radio.
Globally, the single biggest impact comes from the continuing expansion of the market in China, with a projected growth of 20.9% – over three times faster than the global advertising industry – and achieving double-digit growth in every single major medium, according to Carat.
The highest spending categories on advertising this year will be mobile communications, automotive, entertainment, fast food and jewelry, reflecting the growing wealth of Chinese consumers, Carat said.