Global Ad Market to Make Full Recovery in 2011

It’s no secret that emerging economies will see higher growth in advertising expenditures during 2011. The U.S. should also see another rise in ad spending after beginning its economic recovery in 2010. Magna has issued its global ad spending forecast which it estimates will increase by 5.4% and reach a total of $411.7 billion. Some sectors will enjoy significant growth while others will struggle.

Here are the projected spending levels, globally, and percentages of the total by media format:

  • TV $169.1 billion (6.00%) includes broadcast at $125.6 billion and cable at $43.5 billion
  • Online $70.9 billion (+12.5%) includes paid search at $34.9 billion, online video at $4.7 billion, mobile at $2.7 billion , other at $28.6 billion
  • Print $116.0 billion (0.7%)
  • Magazine $35.8 billion (0.8%)
  • Radio $29.5 billion (+3.1%)
  • Out of Home $26.3 billion (7.9%) includes cinema at $2.9 billion, digital out of home at $2.6 billion, other at $20.8 billion

In the U.S., Magna analysts expect advertising growth of 3.9%. Many analysts believe the U.S. ad market ended 2010 with spending of $151.5 billion. A 3.9% increase would bring the 2011 level to $157.4 billion. Online advertising will grow the most with a projected increase of 11.6% for 2011 in the U.S. Look for the search component to be the largest, coming in at $15 billion. Small and medium-​size businesses will fuel most of the spending in search this year. Online video should account for $1.8 billion in spending with $624 million being spent on mobile. Note that the Magna projection for mobile spending is a bit lower than some other estimates.

The other large growth sector in U.S. advertising will be TV. Magna analysts like to exclude the effects of politics and the Olympics in their projections in order to get at a ‘normalized’ spending trend. So without those two large ad spending entities included, TV will rise 5.7% in the U.S. And cable is likely to grow faster than broadcast TV.

Magna analysts also caution that “technology can allow a new medium to serve the same function offered by a traditional medium.” Specifically, they point to consumers’ rising use of search and how it could easily eliminate legacy yellow pages. Because search engine providers can quickly and easily connect with consumers and advertisers, directory companies will likely be changing their business models to stay in the advertising game this year.

[Sources: 2011 Advertising Forecast. MagnaGlobal. December 2010. Web. 31 Jan. 2011; Steady recovery in global ad expenditure. ZenithOptimedia. 6 Dec. 2010. Web. 31 Jan. 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.