ZenithOptimedia promises the best prospects for advertising since 2000

Dec 06, 2004. /Lesprom Network/. Double-digit corporate profits and well-above-trend 4.7% global economic growth have contributed to make 2004 an exceptional year for advertising expenditure in the traditional media, according to report by ZenithOptimedia. Company expects a final total of $370 billion, representing 6.9% growth over 2003.

The advertising expenditure cycle exaggerates the economic cycle: when GDP falls, advertising falls further, but when GDP recovers, the advertising growth rate catches up and typically exceeds GDP across three to four years. ZenithOptimedia has witnessed this same pattern emerging in the present economic recovery, and with this new forecast it is as apparent as ever.    

Europe currently accounts for US$ 94.4 billion or 26% of total world advertising, and Asia-Pacific 20% (US$75.6 billion). At current rates of growth, Asia will eclipse Europe within ten years. This is the more remarkable because Japan represents half of all advertising in Asia and is growing well below the regional and worldwide average. China is already a $9 billion advertising market, the size of Italy. ZenithOptimedia expects it to be a $12 billion market in 2006 (larger than France) and to double by 2011 when it will overtake the UK and Germany to be the world’s third-largest ad market after the US and Japan.

Television is the world’s largest and most powerful advertising medium, collecting revenues of US$136.7 billion or 37.6% of major-media spend this year. ZenithOptimedia predicts it will have the same share in 2007. The medium remains in firm demand, but the supply of audiences is generally increasing to meet this. The threat of serious audience depletion by PVRs remains uncertain but advertisers and agencies are already actively evaluating potential consequences.   

The internet already takes US$8.7 billion or 5.4% of US advertising spend and 3.6% of ad spending worldwide (US$13.1 billion). Three factors make this the fastest-growing medium: rising penetration; its increasing use for both response and now brand advertising; and the ever-growing versatility and variety of online content and applications. 3.6% is a modest foothold, but internet is likely to be collecting more ad dollars than out-of-home by the end of this decade.  

Out-of-home takes 5.2% of the world’s major-media ad spend (US$19.0 billion). ZenithOptimedia predicts it will maintain this share 2005-2007. Note that in Europe, where the medium is the most highly developed, it has grown to command a 6.5% share (US$6.2 billion). Company thinks Europe indicates the longer-term global growth potential for out-of-home in a future where advertisers may depend less on TV to reach mass audiences quickly.     

Advertising expenditure

Major media (newspapers, magazines, television, radio, cinema, outdoor, internet)

US$ million, current prices.  Currency conversion at 2003 average rates.

Year-on-year change (%)

Major media (newspapers, magazines, television, radio, cinema, outdoor, internet)

Regional shares of display advertising revenue (%)

Global shares of display advertising revenue by medium (%)

These shares sum to 99% because a few countries including Russia and the Philippines group newspapers and magazines together