After a superb start, global ad market is now witnessing a modest slowdown as lower than expected economic recovery in the developed markets, coupled with rising fears of double-dip recession, has forced several advertisers to trim budget increases planned for the end of 2011. Growth forecast for the year has been cut to 3.6% from 4.1% given in July. However, the silver lining is the fact that still there are no sharp budget cuts as were seen in 2008.
Focus on developing markets
In the post-recession era developing markets, in general, continue to expand much faster than developed markets in terms of ad spend. While analysts expect developed regions like North America and Western Europe to grow at 3.3% and 2.8% respectively between 2010 and 2013, Latin America is expected to grow at 7.1%, Asia-Pacific at 10.1% and Central & Eastern Europe at 10.4%. However, for the Western Europe market analysts are of the opinion that the continuing debt crisis in the peripheral Eurozone has damaged advertisers’ confidence in Western Europe’s long-term growth prospects.
TV is still the most popular
Television is clearly the most sort after medium for advertisers, and it’s share in global ad spend is rising steadily. As per reports, while it commanded a market share of 37% in 2005, it moved up to 39.8% in 2010 and is expected to be at 40.5% by 2013. However, the Internet remained the fastest growing platform with an average of 14.6% a year between 2010 and 2013, while display remained the fastest-growing segment. Internet was backed up by streaming video ads, thanks to the emergence of do-it-yourself tools that have allowed local advertisers to enter the market.
The rise of Asia
Over the past two years advertising market seems to have grown in all corners of the world (except for Middle East & North Africa in 2011). But a regional break up of global ad market reveals some interesting trends. While North America, backed by US, is still on top, Asia (26%), as an ad market, has grown bigger than Western Europe (23%). In value terms, North America witnessed a cumulative ad spend (across major media) of $165.7 billion in 2011. While political turmoil in MENA witnessed the ad market to go down by 14.2% this year, the scenario is expected to revive soon and the market is expected to grow by 2% in 2012.
Us on top; China’s growing fast
While there are two ‘developing’ markets in the world’s top ten ad markets at present, a ZenithOptimedia forecast suggests that there will be three in 2013. China is now the third-largest ad market in the world, and is catching up quickly with second-placed Japan. In 2005, China was 23% of the size of Japan, in 2010 it was 57% and by as per expectations, by 2013 it will be 82%. Brazil, at sixth place, is even closer to the UK (81% of the size of the UK in 2010). Russia, which was in 13th place in 2010, will be in 10th in 2013.
Focus on developing markets
In the post-recession era developing markets, in general, continue to expand much faster than developed markets in terms of ad spend. While analysts expect developed regions like North America and Western Europe to grow at 3.3% and 2.8% respectively between 2010 and 2013, Latin America is expected to grow at 7.1%, Asia-Pacific at 10.1% and Central & Eastern Europe at 10.4%. However, for the Western Europe market analysts are of the opinion that the continuing debt crisis in the peripheral Eurozone has damaged advertisers’ confidence in Western Europe’s long-term growth prospects.
TV is still the most popular
Television is clearly the most sort after medium for advertisers, and it’s share in global ad spend is rising steadily. As per reports, while it commanded a market share of 37% in 2005, it moved up to 39.8% in 2010 and is expected to be at 40.5% by 2013. However, the Internet remained the fastest growing platform with an average of 14.6% a year between 2010 and 2013, while display remained the fastest-growing segment. Internet was backed up by streaming video ads, thanks to the emergence of do-it-yourself tools that have allowed local advertisers to enter the market.
The rise of Asia
Over the past two years advertising market seems to have grown in all corners of the world (except for Middle East & North Africa in 2011). But a regional break up of global ad market reveals some interesting trends. While North America, backed by US, is still on top, Asia (26%), as an ad market, has grown bigger than Western Europe (23%). In value terms, North America witnessed a cumulative ad spend (across major media) of $165.7 billion in 2011. While political turmoil in MENA witnessed the ad market to go down by 14.2% this year, the scenario is expected to revive soon and the market is expected to grow by 2% in 2012.
Us on top; China’s growing fast
While there are two ‘developing’ markets in the world’s top ten ad markets at present, a ZenithOptimedia forecast suggests that there will be three in 2013. China is now the third-largest ad market in the world, and is catching up quickly with second-placed Japan. In 2005, China was 23% of the size of Japan, in 2010 it was 57% and by as per expectations, by 2013 it will be 82%. Brazil, at sixth place, is even closer to the UK (81% of the size of the UK in 2010). Russia, which was in 13th place in 2010, will be in 10th in 2013.
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Source : IIPM Editorial, 2011.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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