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Global ad spend to increase by 4.9% to $465.5 bn in 2012

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MUMBAI: Following 3.8 per cent growth in 2011, global ad spend is expected to grow by 4.9 per cent in 2012 to $465.5 billion, according to the latest forecast from Strategy Analytics.

Although total US advertising spending is expected to increase by less than the global rate, at 2.7 per cent this year to $152.1 billion, it is a significant improvement on the 0.6 per cent growth in 2011. The US also underperforms Europe as a whole, which is expected to grow by 3.7 per cent to $136.3 billion in 2012.

Strategy Analytics director of digital media strategies Ed Barton explains, “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.”

Global advertising by media type: Looking at spend by media type reveals that global TV advertising is expected to grow by five per cent in 2012 to $188.5 billion, equivalent to 40 per cent of all global spending.

Global print advertising is expected to grow by half a per cent, accounting for a 26.4 per cent share. Other traditional formats including cinema and radio will grow by approximately four per cent.

In contrast, global online advertising is expected to grow 12.8 per cent to $83.2bn in 2012, accounting for 18 per cent of global ad spending.

Barton says, “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.”

US/Europe advertising by media type: It is a similar picture in the US with online advertising leading the way. Online is expected to grow by 6.7 per cent this year to $27.4 billion compared to 3.7 per cent for TV and 2.9 per cent for other traditional formats. Print is expected to decline by 1.5 per cent.

In comparison, online advertising across Europe is expected to grow by 11.7 per cent this year compared to 3.4 per cent for TV and 2.4 per cent for ‘other traditional’ advertising. Print is expected to decline by 0.1 per cent.

Barton notes, "The US continues to be a leader in terms of the share of revenue generated by TV advertising - its share in the US this year will be approximately 41 per cent compared to 35 per cent in Europe and 24 per cent in the UK. In contrast, Internet advertising tends to have a smaller share of spending than in other markets. However, the share of advertising dollars allocated to the Internet continues to grow and is projected to overtake print advertising in the US in 2016 – a year ahead of when this is expected to happen for the total global market."

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