Global ad spend to increase by 4.9% in 2012 to over $465bn
Following 3.8% growth in 2011, global advertising spending is expected to grow by 4.9% in 2012 to $465.5 billion, according to the latest global advertising forecast from Strategy Analytics.
Although total UK advertising spending is expected to increase by slightly less than the global rate, at 4.2% this year - to $20.9 billion - it is a significant improvement on the 1.4% growth in 2011. The UK outperforms Europe as a whole, which is expected to grow by 3.7% to $136.3 billion in 2012. (See Chart 1)
Ed Barton, Strategy Analytics' director of digital media strategies, said: "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 ($500 billion) dollars in 2014."
Global advertising by media type
Looking at spend by media type reveals that global TV advertising is expected to grow by 5% in 2012 to $188.5 billion, equivalent to 40% of all global spending. Global print advertising is expected to grow by 0.5%, accounting for a 26.4% share. Other traditional formats including cinema, out of home and radio will grow by around 4%.
In contrast, global online advertising is expected to grow 12.8% to $83.2 billion in 2012, accounting for 18% of global ad spending. (See Chart 2)
"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," Barton added.
UK/Europe advertising by media type
It is a similar picture in the UK with online advertising leading the way. Online is expected to grow by 10.6% this year to $7.6 billion compared to 0.7% for TV, 0.3% for print and 2.6% for other traditional formats.
In comparison online advertising across Europe is expected to grow by 11.7% this year compared to 3.4% for TV and 2.4% for 'other traditional' advertising. Print is expected 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% compared to 20% in Europe and 18% 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," Barton said.
"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," Barton concludes.
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"