Ad Firm Cuts Global Growth Outlook for 2013, Keeps U.S. Estimate Steady
Southern Europe and Ireland will post their third year of declines before a 2014 rebound, says ZenithOptimedia.
LONDON - Global advertising spending will grow 3.9 percent instead of a previously predicted 4.1 percent this year, with the U.S. projected to grow at a slower 3.5 percent rate and Southern Europe in for a third year of declines, according to the latest ad forecast.
The lowered expectation comes "mainly because 2012 turned out better than we expected, leaving tougher comparatives for 2013," media buying agency ZenithOptimedia said in its updated projection on Monday. In dollar terms, the forecast for 2013 is minimally ahead of the last projection at $518 billion.
Latin America will see the biggest ad spending boost this year with Zenith projecting a 13.2 percent jump. And the Middle East and Africa will also post solid ad growth after the Arab Spring had put a lid on ad momentum.
The so-called Fast-track Asia region, which includes China, India, Indonesia and other countries, was up 11.2 percent in 2012 and will rise 10.3 percent in 2013 and 10 percent-11 percent in 2014 and 2015, Zenith said.
In the U.S., ad revenue will grow 3.5 percent in 2013, in line with its previous estimate, followed by growth of 4.3 percent and 4.8 percent, respectively, in the two years after that, Zenith said.
However, the "peripheral euro zone," which includes the Southern European countries of Greece, Italy, Spain and Portugal, as well as Ireland, which have all been hit by economic and financial weakness, will post a 6.6 percent ad revenue decline in 2013, according to its forecast. This will push annual ad spending to levels last seen in the 1990s.
Greece, for one, will see ad spending drop to $1.18 billion (€900 million), a haul that the country had last recorded in 1994. Italy and Spain will see ad revenue drop to levels last seen in the late 1990s.
Zenith finally sees a rebound in the peripheral euro zone next year when ad expenses should rise 1.5 percent.
In terms of media categories, Internet advertising will continue to be the fastest-growing ad medium this year, with Zenith eyeing a 14.4 percent gain in 2013.
“As the global economy strengthens, more opportunities will open up for companies to expand their businesses,” said Steve King, global CEO for Zenith. “Advertising is an essential tool for launching new products and entering new markets, and advertisers will increase their budgets wherever they can increase the return on their investment.”
Ad growth will accelerate to 5.6 percent in 2015, Zenith said.
Emerging markets are forecast to grow by 8.2 percent on average in 2013, with mature markets set to expand by 1.8 percent, weighed down by the euro zone crisis. "Over the next two years, we expect growth to pick up in both rising and mature markets, reaching 9.4 percent and 3.5 percent, respectively, in 2015," Zenith said.