Global Ad Spending Online Expected to Increase

08/08/2008

According to a recently released report by ZenithOptimedia, the identical factors that will decrease ad spending among North American and European marketers will cause an increase in global online ad spending.

The ad forecast report was revised after experts examined the current credit crisis and found that it would have an impact over and above the most common sectors hurt by it -- eg, car and home sales. This updated forecast lowered overall growth for ad spending for North America and Western Europe as follows:

North America: lowered to 3.5%, down from a previously stated 3.7%. Western Europe: lowered to 3.7%, down from a previously stated 3.9%.

The report stated that marketers are paying more attention than ever to how they allocated their advertising dollars. Couple this with the fact that online advertising tends to be less expensive and more trackable than offline advertising, more and more advertisers are investing in online marketing.

The fact that online advertising mediums are constantly improving is also attributed to advertisers’ shift to online marketing. As an example, the report states, “The quantity and quality of online video is improving all the time, and online audiences for full-length films and television programs -- and the ads that surround them -- are growing rapidly."

Online Advertising: The Potential In Real Dollars

In this updated ad spending forecast, Zenith predicts that online spending will account for over 52 billion dollars this year, and over 78 billion by 2010.

The Zenith report highlighted the media outlets that are most likely to suffer from the shift to online advertising, specifically print, radio and newspapers. It says that newspapers, which have been losing ad spending to the Internet for a few years, will fare the worst.

There was one offline media outlet that was projected to grow according to the report: outdoor media. This medium is expected to claim 6.7% of the global ad market by 2010, up from 6.4 percent in 2008.

This Zenith report is in contrast to other industry reports on online ads spending. Case in point: The recent Interactive Advertising Bureau report found that though online ad spending for January-March 2008 increased when compared to the same period in 2007, it was less than in the October-December 2007 time period.

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