Ad markets to outperform the economy next year, says Zenith

by **hlk** Sat 10 Dec 2011, 09:04

LONDON: The global advertising market is forecast to grow at a faster rate than the world economy in 2012, due to key factors such as the United States presidential election and the London Olympics, although expections have slipped in recent months.

According to a new forecast by media service agency ZenithOptimedia, the global advertising market will grow by 3.5% in 2011 and by 4.7% in 2012, down from a forecast in October of 3.6% growth in 2011 and 5.3% in 2012.

The reduction stems from the eurozone debt crisis and the impact it is having on business confidence although overall the forecast shows that advertising has held up well during the uncertainty. Zenith attributes much of the strong spending to the fact that unlike the downturn in 2008, companies have cash available to spend and are prepared to use it to grow market share.

The Japanese market should also rebound as it recovers from the huge earthquake in March, and the European soccer championships next year should also attract marketing spend.“The global ad market is therefore remarkably strong at a time when the eurozone threatens to fall back into recession and drag down the growth of its trading partners,” the group said.

“In general, advertisers have built up large cash reserves and thanks to exceptionally loose monetary policy in the developed world are earning very little interest on this cash.”

According to a Reuters poll in October, economists expect global gross domestic product (GDP) to grow by 3.8% in 2011 and by 3.6% in 2012.

Zenith expects Western Europe to grow by just 2% in 2012 even though the London Olympics and the soccer championships will lift spending.

North America was described as looking “decidedly healthier” with growth of 3.6% forecast for 2012.

It expects developing markets which it defines as everywhere outside North America, Western Europe and Japan to continue the strong growth, increasing its share of the global ad market from 32.3% in 2011 to 35.9% in 2014. Reuters