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Forecast Indicates U.S. Ad Spending Has Bottomed Out; TV and Online Seen Outpacing Other Media

Jun 25, 2010  •  Post A Comment

A new forecast indicates ad spending in the United States bottomed out earlier this year, with the overall figure for 2010 expected to decline 1.3 percent to $145 billion, down from the $147 billion spent in 2009. U.S. ad spending for 2011 is projected to increase 2.5 percent to $149 billion in the most recent 70-nation forecast report from GroupM.

The U.S. trend for 2010 is in contrast to the global advertising picture, where spending in measured media is expected to increase 3.5 percent in 2010 to $451 billion. That figure was revised up from a projected 1 percent growth six months ago.

The study, “This Year, Next Year” is part of GroupM’s media and marketing forecasting series drawn from data supplied by parent company WPP’s worldwide resources in advertising, public relations, market research and specialist communications. It was released Friday by GroupM Futures Director Adam Smith and GroupM Chief Investment Officer Rino Scanzoni.

"The U.S media marketplace has clearly bottomed out earlier this year and we expect moderate growth in 2011 consistent with GDP improvement,” said Scanzoni. “Television and online spending will outpace other media as they lead with return on investment metrics."

If achieved, the global dollar total of $541 billion for 2010 equals the amount spent in 2006-2007, or in 2004-2005 when accounting for consumer price inflation. The report also forecast a 4.5 percent global increase for 2011.

The 2009 figure for the U.S. represented a 7 percent drop from the previous year.

As anticipated, countries in the so-called BRIIC nations (Brazil, Russia, India, Indonesia and China) contributed significant growth to the global figures.

“China remains the world’s biggest contributor to ad growth in 2010, accounting for one in three of all net new ad dollars we expect this year, and one in five as the rest of the world catches up in 2011,” said Smith. “Indonesia and India are the next biggest contributors from Asia. Our grouping of ‘new world’ countries accounts for 34% of the global economy this year and 30% of measured media investment.”

Smith said digital advertising expenditures are also playing a key role in worldwide advertising expenditure growth.

“The recession has not impacted Internet ad spending except in a handful of highly stressed markets, adding 10 percent to its measured total in 2009,” Smith said. “What continues to power the medium is the steady advance in creativity, analysis and technology which embeds digital in almost all marketing activity. Measured Internet added two points of global ad share in each of 2007, 2008 and 2009 and we think it will sustain a rate of one point a year this year and next, to reach 16 percent in 2011.”

 

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