GroupM revised its global 2013 ad spending forecast to 4.5% growth, with US ad spending expected to rise only 2.7% as a consequence of continued sluggishness in the U.S. and European economies. The forecast is almost a full percentage point lower than the 5.3 percent spending hike GroupM predicted in June.
The revised spending forecast was made in GroupM’s biannual worldwide report, “This Year, Next Year,” which also concluded that 2012 advertising spending in measured media will hit $508BN, 4.6% up over 2011 spending ($486BN).
The 70-country forecast predicts that global ad spending in 2013 will increase 4.5 percent compared to 2012, to $531BN. The report was prepared by GroupM Futures Director Adam Smith and released at the UBS Global Media and Communications Conference in New York.
For U.S. market, advertising investment in measured media grew 3.5 percent in 2012 to $152.4BN, up from $147.2BN in 2011. For 2013, the expected growth is of 2.7%, to $156.5 BN.
Ad spending in 2013 won’t enjoy the boost from Olympic and election-year spending we saw in 2012 (…) At the same time, overall economic conditions in the U.S. do not support more than very moderate advertising spending expansion.
GroupM Chief Investment Officer
According to Adam Smith, ad investments in Eurozone periphery (Greece, Ireland, Italy, Portugal and Spain) is expected to fall 15% in 2012, 40% lower than the peak spending year 2007 and comparable in real terms to 1998 spending levels.
He also mentioned that Western Europe is the slowest region for ad spending growth, with a 2.6% decrease expected in 2012, the worst year since 2009’s 11% collapse. He added that Western Europe accounts now for 20% of global advertising, down from 30 percent in 1999, and is expected to account for 17% by 2017.
When it comes of Russia and Turkey, they continue to lead ad spending growth in Central and Eastern Europe, a regional economy that is one-fifth the size of Western Europe but with twice the ad spending growth.
The report also mentions that investments in digital media go up and will account for 19.5% in measured ad spending globally in 2012 ($99BN) and 21.4% in 2013 ($114BN), with respective growth rates of 16% and 15%.
Digital ad growth remains strong, sustained and structural, though one or two highly-digitized European markets now look for growth in usage as opposed to new users (…) More newsworthy is our rising dependence on digital to support total growth, now furnishing over 60 percent of new incremental ad dollars in 2012 and 2013. This produces a reciprocal reduction in TV’s contribution, being the only other large growth medium (…) We continue to predict TV’s share of global ad budgets peaking in 2012 at 43 percent as other screens begin to claim meaningful amounts of consumer time
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