Ad Spending Growth by Global 100 Occurring Outside of U.S. Market

Earlier this week, I highlighted releases by several large agencies that predicted a grim 2010 ad market in the U.S. and improving conditions outside the U.S. As usual, there’s more to the story. An article in Ad Age last week highlighted some of the details.  Laurel Wentz reported that when it 1158741_gaia_shinecomes to overall ad spending, global marketers spent 38% of measured media in the U.S. last year which equated to $46.3 billion. The remaining 62% was spent elsewhere.

In some industries, U.S. companies are spending the bulk of their ad budgets within our borders. This is especially true for pharmaceutical concerns such as Eli Lilly & Co., Merck & Co. and Abbott Laboratories. Over 8 in 10 media dollars are spent in the U.S. by these firms. Similarly, European pharma firms also spend heavily in the U.S. market and this trend is notable for two reasons. The U.S. market represents growth and D‑T-​C advertising is “largely banned” in Europe.

A look at the consumer products industry tells a different story.  In the U.S., the consumer products industry is generally considered mature and will grow, more or less, in step with the economy. But  developing nations are just beginning to demonstrate the appetite and the ability to pay for Western-​style goods. This high-​growth situation explains why Yum Brands, Avon Products, and Colgate-​Palmolive Co., all U.S‑based firms, are spending more than 10% of their media budgets in China.

So while the overall global ad market picture may not be particularly bright for 2010, some sectors and geographic locations will fare better than others. Jonathan Barnard, ZenithOptimedia's head of publications is looking to 2012 as the year the ad industry will return to a 5% growth rate that is considered “normal”.

[Source: Wentz, Laurel. Top 100 Global Advertisers Heap Their Spending Abroad, Advertising Age, 11.30.09]
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.