Olympics next year might lift television's share of the global ad market to a record 38.2 per cent, as per an ad spend forecast made by global media service agency ZenithOptimedia.
"Television faces many challenges - the spread of PVRs; migration of viewers from premium mass-audience channels to cheaper specialist channels; and competition from the Internet, to name three of the biggest. Despite all these, television will increase its share of global ad expenditure from 37.9 per cent in 2007 to 38.2 per cent in 2008, an all-time record," claims the report.
According to the report, the Beijing Olympics will give an extra boost to television in 2008, particularly in China and its neighbouring countries. Television's share is expected to grow by 0.5 percentage points to 41.3 per cent in China, by 0.3 points to 42.5 per cent in Asia Pacific, and by 0.2 points to 38.2 per cent across the world. In the absence of this stimulus, its share will fall back to 38.1 per cent, but this is as high as its previous peak, in 2004.
"However, the faster growth of ad markets in the rest of the world is counteracting this trend. In these markets, television tends to attract a much higher share of ad expenditure because they are more dependent on FMCG advertisers (who greatly prefer television over other media) and their inhabitants have less media choice," says the report.
The advertising forecasts for the Internet have been revised upwards yet again. "The Internet is expected to grow at 29.9 per cent this year (up from 28.6 per cent three months ago) and 85 per cent between 2006 and 2009 (up from 82 per cent). Online video and local search are the new, fast-growing segments, but display, classified and the rest of search are also still growing rapidly. "Expect Internet advertising to account for 9.5 per cent of all expenditure in 2009, fractionally up from the 9.4 per cent we forecast three months ago," says the report.
Newspapers are suffering the most from the depredations of the Internet, which is better at delivering timely news and is an efficient substitute for newspaper classifieds. The report expects newspapers' share of world ad expenditure to fall from 29.0 per cent in 2006 to 26.2 per cent in 2009. By contrast, outdoor is in rude health and forecast to increase its market share from 5.6 per cent to 5.9 per cent over the same period. New digital displays make it easy for advertisers to book and distribute eye-catching ads at short notice.
The continued slump in the US housing market has led to a sharp drop in property and construction advertising, particularly property classifieds in newspapers. This, and the recent credit squeeze, has led to a downgrade of the forecast for growth in the US this year from 3.3 per cent to 2.5 per cent.
Forecasts for Western Europe, Asia Pacific and Latin America are largely unchanged this year. Central & Eastern Europe and West Asia - already the stand-out growth regions - have been upgraded again. "We now expect Central & Eastern Europe to grow 18.3 per cent this year (up from 16.9 per cent three months ago) and Africa/Middle East/Rest of World to grow 17.2 per cent (up from 15.6 per cent). Eight of the 10 fastest-growing markets in the world are in Central & Eastern Europe; the other two are in the Middle East," says the report.