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Strategy Analytics forecast predicts that Global ad spend will grow by 4.9% in 2012


By The Drum Team | Editorial

February 27, 2012 | 3 min read

Global advertising spend has been predicted to grow by 4.9% this year, reaching $465.5 billion dollars, the latest Global Advertising Forecast from US market intelligence company Strategy Analytics has claimed.

2011 saw growth of 3.8%, a figure that is expected to rise to nearly 5% this year, although the forecast has also predicted that UK advertising spend will increase at a slower rate, of 4.2%, to $20.9 billion. This will mean a small growth of 1.4% for the UK on 2011’s rate.

UK growth is expected to outperform that of Europe as a while, which is predicted to grow by 3.7% to $136.3 billion (see chart 1 in gallery).

Ed Barton, strategy analytics’ director of Digital Media Strategies, explained: “Major global-impact events led by the Olympics, the US Presidential Elections and the European Football Championships as well as Japan’s continuing recovery from the earthquake combine to paint a brighter picture globally in 2012 for advertising spending overall. Furthermore we expect that total ad spend will surpass half a trillion ($500bn) dollars in 2014.”

TV advertising is expect to grow by 5% in 2012, to £188.5bn, around 40% of all global spend. Global print advertising is also set to grow at 0.5%, while other traditional formats such as cinema, out-of-home and radio advertising will grow by around 4%.

However, global online advertising is expected to grow by 12.8% to $83.2bn this year, which will make up 18% of global advertising spend (see chart 2.)

Barton added: “Online advertising will continue along its growth trajectory fuelled by strong growth in emerging markets and increased spending volumes on social networking and online video advertising.”

The UK’s online advertising spend is expected to grow by 11.7% this year, while print is set to decline by 0.1%.

“The UK is way ahead in terms of the share of spending generated by online - its share in the UK this year will be around 36 per cent compared to 20 per cent in Europe and 18 per cent globally. Furthermore, advertising spend on online has already overtaken print in the UK and is expected to do so in Europe and globally in 2017,” added Barton.

“Europe presents the sternest challenges to forecasting: structural macroeconomic issues based on unsustainable national and household fiscal deficits and the ever-present threat of a major shock in the form of a Eurozone default means that the region is one defining incident away from all forecasting outlooks effectively being rendered irrelevant in a single stroke.

However, assuming that the Eurozone can build its way out of the current uncertainty we are likely to see a situation characterized by some territories suffering a long term zero-to-negative growth environment where spending will remain very low (Spain, Greece, Italy, Portugal). Stronger Western European economies (UK, Germany, France) will grow slowly with the occasional fillip from one off drivers such as major sporting events. Growth, albeit from lower spending volumes, is likely to come from Eastern and Central Europe (Turkey, Russia) and the ongoing growth trajectory of online formats, in particular online video and social networking.”

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