ZenithOptimedia cuts forecast for worldwide ad market by almost �1.5bn, as Egypt and Japan almost halt commercial ads
The Japanese earthquake and ongoing turmoil in the Middle East will strip almost $2.5bn (�1.5bn) from global advertising spend this year, according to a new forecast from Publicis Groupe's media buying network ZenithOptimedia.
ZenithOptimedia has cut is forecast for growth in the global ad market this year from 4.6% to 4.2%, although the network believes that the underlying recovery remains "healthy".
The company pointed out that there were immediate consequences for TV advertising in these markets with Egypt ? "by far the largest ad market to be caught up in the Middle Eastern uprisings" ? running "almost no advertising" during the uprising.
In Japan during the immediate weeks after the earthquake and tsunami broadcasters replaced almost all commercial advertising with public service messages and advertisers have since been "very careful about the content and placement of their messages".
"Blackouts and distribution problems will hinder media consumption for months to come," the ZenithOptimedia report concludes. "We do not expect these shocks to derail the global recovery in the long term, however."
ZenithOptimedia expects some of the "missing advertising" to "reappear later this year" with strong growth expected next year. The company has upgraded the global forecast for 2012 from 5.2% to 5.8%.
Analysts at BAML point to the "maxi-quadrennial" benefit in 2012 of spending around the US presidential elections, the London Olympics and the European football championships which "typically add 1% to 2%" to global ad growth.
ZenithOptimedia reckons that Japan's ad market is set to dip by 4.1% this year and Egypt shrink by 20%, but in 2012 the two will rise by 4.6% and 12% respectively.
The company also said that internet advertising will overtake newspapers to become the world's second largest ad medium ? behind TV ? in 2013.
"While we have long expected this to happen in the near future, this is the first time this event has fallen within our forecast period," the company said. "Newspaper expenditure was still 51% larger than internet ad expenditure in 2010 but newspaper expenditure is shrinking by 1.4% per year ... [while] internet advertising continues to grow at breakneck pace."
ZenithOptimedia forecasts that newspaper ad expenditure will fall from $95bn in 2010 to $91bn in 2013, while internet ad spend will rise from $63bn to $94.5bn over the same period.
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Source: http://www.guardian.co.uk/media/2011/apr/11/global-ad-spend-egypt-middle-east
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