ZenithOptimedia (Publicis) says that global ad spend for 2009 will be 10.2% compared to lower than 2008, but that in 2010 it is expected to be up 0.9% compared to 2009. Group M (WPP) thinks 2009 spending will only be down about 6.6% from 2008 levels and expects 2010 to be 0.8% above 2009. There is no expectation that ad spending will get back to 2008 levels anytime soon.
Historically, such companies tend to make their most favorable estimates for the coming year in December. Revised April estimates tend to be down a little. By July, the estimates are down more, and by October, the even-lower estimate is usually close to what the real number turns out to be. Hence today’s 2010 estimates are probably optimistic.
Compared to the U.S., global estimates can be considered good news. ZenithOptimedia expects 2009 American ad spend to drop 12.9% compared to 2008, and the decline will continue by a further 2.6% (compared to 2009 levels) in 2010. Group M has the U.S. falling 8% this year and projects 2010 decline to be a further 4.3%.
In addition, both agencies expect ad sales at traditional media to drop further and faster than the overall figures would indicate as more of the total spend is diverted to digital. And that’s not only for 2010. ZenithOptimedia says that within the next five years or so Internet ad revenue – based primarily on search – will overtake newspaper ad revenue.
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ZenithOptimedia: Global advertising expenditure estimate, 2008–2011 (US$ millions)
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Media type
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2008
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2009
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2010
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2011
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Newspapers
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123,229
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115,491
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114,038
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114,717
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Magazines
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55,754
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54,130
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54,915
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55,975
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Television
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184,487
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185,447
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196,818
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207,886
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Outdoor
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32,662
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33,506
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35,819
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38,244
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Internet
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49,876
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58,703
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71,213
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84,145
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Note what is happening in the magazine business and remember that publishers tend to raise their ad rates to offset declining demand for ad pages, so level dollars actually represent fewer ad pages. While newspaper advertising dollars are on a level track, remember that most papers in the U.S. are already in crisis and cutting back on editorial content due to declining ad pages. Also, newspaper advertisers have never been big users of stock images, because most newspaper ads tend to use product shots.
Television revenue is more than newspapers and magazines combined. It is expected to grow, but much of that growth will be with the local cable operators, not the networks. Does video stock have more potential than stills? Will those who advertise with the local cable operators be looking for the same type of clips that have been traditionally used by the networks or will they want an ad that is shot start to finish at their locations?
And then there is the Internet, where advertising revenue is expected to be up 69% in 2011 compared to 2008. At the rate it is climbing, it should easily exceed newspaper advertising revenue by 2013 or 2014. A huge portion of that revenue is for Internet search, which makes no use of pictures. When pictures can be sold for Internet ads, the fees paid are a fraction of what is paid for print ad use.