Global Adspend Heats Up; Internet to See Benefit

This summer is expected to be hot for the advertising industry as media agency ZenithOptimedia predicts a strong global recovery. The Internet is expected to benefit more than most other media.

Spurred by the Olympic Games, European Championship football, and elections in Canada and the U.S., the firm forecasts a 3.2 percent swell across eight large ad markets, marking the most significant increase since 2000.

Further analysis of the markets – U.S., Canada, France, Germany, Italy, Spain, the UK, and Japan – which together accounted for three-quarters of global ad expenditures in 2003, revealed that growth would taper off to 2.3 percent a year in 2005 and 2006. Comparatively, the average growth in the 1990s was 2.5 percent, while the ad-strong mid- to late-1990s experienced 5.4 percent growth

Led by the U.S., ZenithOptimedia projects the global ad spend on major media (including newspapers, magazines, television, radio, cinema, outdoor, and Internet) to reach $259.14 million in 2004 and grow to $278.18 million in 2006. The U.S. will account for $155.27 million in 2004, followed by Europe (France, Germany, Italy, Spain, the UK) at $63.29 million; Japan at $34.29 million; and Canada at $6.27 million.

The Internet will play a strong role in the advertising rebound, particularly in the U.S., the UK, and France. ZenithOptimedia supported the findings from PricewaterhouseCoopers and the Interactive Advertising Bureau that paid search would be integral to the recovery for the U.S. The company expects 8 percent growth in Internet ad spending in the U.S. in 2004.

The firm forecasts 5.5 percent growth in total major media ad expenditure for the U.S. in 2004. Tying with the Internet for the highest ad growth rate in the U.S. are cable television and spot television, while newspaper advertising demonstrates the smallest increase at 4 percent.

The Internet fares even better in the U.K., as ZenithOptimedia forecasts a 16.9 percent increase in 2004, with outdoor (8.9 percent) and radio (7.2 percent) as the only other standout forms of media. Forecasts for France put television, radio, and the Internet to be the only media worthy of attention.