GroupM forecasts global ad spending to surpass $500 bn in 2011

MUMBAI: Global ad spending in measured media is expected to exceed $500 billion for the first time ever next year following an economic recovery that also sparked significant ad spending increases in 2010, according to a revised report from GroupM.

The report also revealed that digital media outlets are challenging newspapers as the world’s number-two preferred medium (behind television) in measured advertising investment.
The 70-country forecast predicted that worldwide ad spending in 2011 will reach almost $502 billion, a 5.8 per cent increase over 2010 spending of $474 billion. In the U.S. 2011 spending is expected to hit $147.7 billion, a 3.7 per cent increase over the $142.5 billion invested in 2010.

The study, This Year, Next Year also forecasted that ad spending in 2010 is expected to increase by 5.9 per cent over the $448 billion spent in 2009; in the US, 2010 spending increased 1.2 per cent over 2009, when almost $141 billion in ad expenditures was reported.
The study 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 by GroupM Futures Director Adam Smith and GroupM Chief Investment Officer Rino Scanzoni at the UBS Global Media and Communications Conference.

Scanzoni said, “We’ve seen a significant rebound in advertising spending in the U.S over the last six months. Television and online media have been the primary beneficiaries of the rebound in spending. In television, the growth is driven by local TV as political advertising—coupled with the resurgence in growth from the retail and auto categories—has risen from the historically depressed levels of 2009.”
Scanzoni added that moderately accelerated growth is anticipated in 2011 as corporations with significant cash reserves deploy investment in marketing and advertising to drive top-line growth.

Measured global advertising has recovered nearly all the dollars lost in 2009, according to the report, which also said the recovery has been broad-based with spending increases reported in categories including toiletries and cosmetics, automotive, beverages, retail, financial services, entertainment, and food among others.

Significantly, the report said measured internet advertising is expected to contribute 37 percent of global ad growth in 2011 and is likely to reach $82 billion, a growth rate that suggests it will overtake newspaper spending (forecast at $90 billion in 2011) at some point in 2012.

“Internet spending may indeed already have eclipsed newspapers if one allows that measured internet ad investment does not include substantial advertiser investment in content creation, search-engine optimization and analysis,” commented Smith.

Nations expected to contribute the largest dollar amounts in 2011 ad spending growth are the U.S. and China, each with at least $5 billion, followed by Canada, Russia, Indonesia, India, Brazil and Japan, each expected to add $1 billion-plus in spending growth.

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