ZenithOptimedia Cuts Global Ad Forecast for 2012, Increases U.S. Estimate

Special events, including the London Summer Olympics and the U.S. elections, will help TV attract a record 40.4 percent share of global ad spend this year, the firm projects.

Media planning firm ZenithOptimedia has further reduced its forecast for global advertising growth amid continued financial challenges in Europe, but it has boosted its U.S. projection yet again.

In June, the company had adjusted its predictions in the same directions.

For the U.S., Zenith now forecasts a 4.3 percent gain in 2012, up from 3.6 percent previously, "given the current economic conditions." But it added: "As we move further past the recession, we expect increases of 3.6 percent in 2013 and 4.4 percent in 2014, slight downgrades from our last forecast. While we are past the worst of the economic downturn, growth remains slow."

Zenith predicts the largest increases in U.S. ad spend for 2012 in Internet/mobile (+17.9 percent) and spot TV (+12 percent).

Global advertising will grow 3.8 percent globally in 2012, from the 4.3 percent forecast it made in June, to $501.5 billion. The European soccer championship this summer, the London 2012 Summer Olympics and this fall's U.S. elections will help TV attract a record 40.4 percent share of global ad spend in 2012, according to the firm.

But it projects improved growth of 4.6 percent in 2013 to $524.7 billion and 5.2 percent in 2014 to $552.1 billion led by developing markets and digital media.

“Advertisers are broadly continuing to invest despite the global economic concerns and issues,” said ZenithOptimedia global CEO Steve King. “However, they are seeking to ensure that any expenditures are delivering strong return on investment. The U.S. continues to deliver solid growth. This, combined with the growth in developing markets and in digital media, has helped mitigate the drop in euro zone spending.”

Next year, developing markets will grow by 8 percent, with Internet advertising jumping 15 percent, according to Zenith.

The euro zone is weighing down the firm's predictions for Europe as a whole. Since June, it has cut its 2012 forecast for Western Europe from 0.4 percent growth to a 0.7 percent drop and its forecast for Central and Eastern Europe from 6.2 percent growth to a gain of just 1.8 percent.

The euro zone will return to slow ad expenditure growth in 2013 after the decline in 2012 though. "Its economy is clearly in serious trouble, with deep recessions and painful unemployment in markets like Italy, Spain, Portugal, and of course Greece," Zenith said. "In these markets we expect ad expenditure to fall sharply this year, by between 6.5 percent (in Italy) and 33.2 percent (Greece)."

Email: Georg.Szalai@thr.com

Twitter: @georgszalai


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