Ad Spending to Slow for Balance of 2011

There’s no question that we’re in an ad recovery, especially given the strength of the rebound last year: 8.0%. What forecasters can’t settle on is the level of ad spending growth seen for 2011. MagnaGlobal had previously predicted a global increase of 5.6%. But that forecast has been revised, down.

General global weakness will contribute to a slightly lower ad spending increase of 5.2% for 2011. Worldwide, this level will still generate $428.4 billion (constant currency basis) in ad spending this year. MagnaGlobal analysts say that the largest component of ad spending will be TV with a 40% market share. Increased consumer attention, globally, to the Internet will drive spending on that format to second place next year. By 2016, the global Internet ad market will reach $129 billion.  Key to this increase will be improved ad serving technology, more efficient search results, and social media.

The forecast also downgraded expectations regarding a 2011 growth rate for print media. While a decline is now predicted for 2011, analysts say that traditional newspapers and magazines can expect a 1.6% total increase through 2016.  Higher literacy rates and slow-​to-​emerge online adoption rates in some companies will contribute to this increase.

For the U.S. market, Magna believes a 2.9% ad market increase is realistic for 2011. This is slightly lower than the previous estimate of 3.1%. Online and TV advertising should continue to do particularly well through year-​end. Analysts say, “The economy still suffers from a depressed housing market, sluggish employment conditions and fiscal retrenchment at all levels of government.”

[Sources: MagnaGlobal Releases Global Core Media Advertising Forecast. Magnaglobal​.com. 16 Jun. 2011. Web. 28 Jun. 2011; Szalai, George. MagnaGlobal Cuts U.S. Global Ad forecasts for 2011. HollywoodReporter​.com. 16 Jun. 2011. Web. 28 Jun. 2011] 
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.