Global cold front ahead for TV ad spending

Glacial growth forecast through '09 despite Olympics

LONDON -- Global television ad spending looks to set to struggle in 2008 and 2009 but should begin to rebound in 2010, according to new research published Monday by Screen Digest.

Television advertising spending is forecast to increase by 1.9% in Europe and 1.5% in the U.S. in 2008, in both cases growing slower than the economy, which is forecast to grow annually by 3.6% in Europe and 3.7% in the U.S. over the two-year period.

Although events including the Olympic Games and next year's European soccer championships will prove a temporary boost to the sector, they will not compensate for the overall downturn in the next two years, the research concludes.

By 2011-12, as the European and U.S. economies begin to pick up, overall advertising rates will grow by 5% in Europe and 6% in the U.S., but the bulk of that growth will be driven by online advertising that will continue to sap more traditional television budgets, the research forecasts.

Digital and multichannel revenues also is expected to increase. Online advertising is predicted to grow an average 17% each year from 2008-12, while digital advertising growth is expected to experience advertising growth rates of 20% per year.

"Advertising spending tends to amplify economic cycles -- and in some cases actually anticipates downturns," report author Vincent Letang said.

"Whilst the overall picture for advertising revenues is flat or in decline, two areas will enjoy growth; online will continue to grow apace, buoyed by a strong search advertising market and digital television channels will be taking up a bigger share of ad budgets by 2012 at the expense of traditional broadcasters."