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Ad Spending Forecasts Vary, But Agree on Slight Rise in 2013

5 Dec, 2012 By: Doug McPherson

NEW YORK – Forecasters expect modest ad-spending growth in the next year, but say global ad spending will rise from 4.1-percent growth in 2013 to a more robust 5.6-percent growth in 2015, reaching $574 billion. ZenithOptimedia, GroupM and Magna Global offered their predictions at the UBS Global Media & Communications Conference in New York on Monday. GroupM is also calling for moderate growth next year – 4.5 percent.

And while ZenithOptimedia (ZO) believes global spending growth in 2012 will close out at 3.3 percent – lower than a forecast it published earlier this year – GroupM’s global 2012 estimate is a 3.5-percent rise and Magna estimates growth this year will end at 3.8 percent. The Publicis Groupe media agency network predicts a jump in overall ad spending in the U.S. of 4.3 percent in 2012, 3.5 percent in 2013, 4.4 percent in 2014 and 4.7 percent in 2015.

In the U.S., ZO’s latest ad spending forecast predicts ad spending will grow at a modest but fairly steady rate during the next few years, aided mostly by digital media, including social and mobile platforms.

Analysts say digital media is driving growth in the U.S. and globally. “Advertisers are willing to increase their budgets wherever they can achieve a strong return on investment,” says Steve King, ZO’s Global CEO. “Developing markets, social media and online video are all growing rapidly, supporting continued expansion in global ad expenditure despite stagnation in the Eurozone.”

GroupM futures director, Adam Smith, agrees and adds, “Digital ad growth remains strong, sustained and structural.”

Digital continues to beat predictions for spending in other categories, particularly as online video use rises. Internet ad spending is expected to grow at a rate of 18.1 percent in 2013, 18.3 percent in 2014 and 17.6 percent in 2015.

Within the Internet ad spending category, social media advertising is expected to rise 37 percent in 2012. Mobile continues to outpace other media, growing 58 percent in 2012. Online display advertising is projected to increase 11.5 percent in 2012. Paid search spending will grow 15 percent in 2012. Video spending is expected to increase 29 percent in 2013.

Network TV spending is expected to end 2012 with a modest 1-percent boost, largely due to the Summer Olympics, but ZO downgraded its estimate for the sector next year to a decrease of 2 percent.

While ZO predicts stable growth for the U.S., which spends more on advertising than anywhere else in the world, the U.S. fiscal cliff could pose a major threat to global ad spending in 2013, according to its forecast.

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