Advertising grows faster than world GDP

Global: Advertisers/Brands; Agencies; The Media
World Adspend Growth to Hit 6% in 2006 Thanks to Soccer

The 2006 soccer World Cup will not only bring national glory to the winning team, it is also predicted to boost global adspend from last year's 4.9% growth (the average across the past decade) to 6% in the current year, according to Monday's forecast from ZenithOptimedia. After which the crystal ball clouds slightly, pointing to above-trend but marginally slower growth, increasing by 5.6% in 2007 and 5.3% in 2008. The survey also reveals
Advertising is now growing faster than world GDPGross domestic product will be outpaced by ad growth between now and 2008. Advertising accounted for 0.96% of world GDP in 2005. ZO expects this to rise to 0.99% by 2008 - the first period of consistent out-performance since the late 1990s, suggesting that the advertising cycle has at last emerged from the trough it entered in 2001.
Emerging markets lead global ad growthIn the period 2005-2008, six of the ten largest contributors to advertising growth (and eleven of the twenty largest) will be emerging markets, notably Brazil, China, Indonesia, Mexico, Poland and Russia. All are all top-ten contributors of new ad dollars. ZO expects their collective ad markets to grow by US$19.2 billion between 2005 and 2008 - providing 27% of total world growth - while their share of world expenditure will rise from 7.9% to 10.8%.
China continues to power up the ad league tableChina was the seventh-largest ad market in 2005 and is set to become the fifth-largest in 2008. ZO expects it to grow by 66% over the three-year forecast period, overtaking Italy in 2006 and France in 2008. It is also likely that Russia will also be a top-ten market by the end of Zenith's forecast period, more than doubling in size as it leaps from 14th place in 2005 to 8th in 2008.
Internet advertising will overtake outdoor in 2007Few in the ad industry can keep pace with the exponential growth of the internet - and Zenith is no exception, revising its internet adspend forecasts upward once again. Its latest expectation is that online media will attract 6.5% of all advertising in 2008, up from 4.5% in 2005 (and up from the 6.0% ZO predicted for 2008 as recently as December). The internet is now firmly established as a mainstream advertising medium in developed markets - and in many developing markets too. It is set to overtake outdoor in volume in 2007, even though outdoor too is gaining share. By 2008 the web could be ready to overtake radio's 7.9% share, down from 8.5% in 2005).