ZenithOptimedia, a unit of French advertising group Publicis slashed its 2009 global advertising growth projections yet again. They now predict the global advertising market to decline 8.5% this year as compared to its previous prediction of a 6.9% decline. The forecast has revealed declines as high as 18.5% in magazine advertising, 13.8% in outdoor and 8.1% in radio in 2009. The report referred to factors such as unemployment as driving uncertainty around ad expenditure and creating a short-term trading environment with large volumes of activity being booked just two to four weeks in advance.
How badly are the sectors hit?
In the recession-struck first half of the year companies continue to cut advertising spending. The sharpest cuts were observed in finance, automobile and business travel. Whereas ZenithOptimedia’s ad report also stated that China’s ad growth should still grow 5.4% this year, and India’s 7.7%. Hence the worsening economic activity will strongly hit radio, outdoor, magazines and cinema, while magazines and outdoor advertising looks vulnerable due to their long-lead booking deadlines. The report eludes stating that there is a “mild recovery” expected in the sector during 2010. So there is hope in the ad market next year to creep up stealthily with overall decline of 0.8%. Yet, North America should decline for a third year in 2010, shrinking a further 2.4%, while Western Europe will stagnate next year. While in 2011 the report concluded stating that, all regions should have recovered and global advertising expenditure should grow 4.3%. Similarly familiar virtues of ‘transparency, accountability and flexibility have proved even more attractive in a recession than ever’ with reference to online advertising.
Growth in online advertising:
The same report also states that Online advertising will grow by 10.1% in 2009. As stated by UTalkMarketing, companies look at the “transparency, accountability and flexibility” of the web to get the best return on investment. Spending on online ads is expected to overtake expenditure on TV ads by the end of this year, according to Internet Advertising Bureau. We have kept you updated about the ups and downs of the advertising sectors with any growth predictions in the Digital Media Industry. In such a scenario, the onus of advertising on the web actually begins to fall on the shoulders of publishers. They need to create content that engages people enough that they begin to spend time online. Standardization, transparency and a genuine will to improve conversations between brands and their audience is as much a prerogative of publishers as it is for advertisers.”The economic crisis seems to be actually accelerating the shift of marketing funds online”, said Karin von Abrams, senior analyst at eMarketer. ZenithOptimedia in their report also mentioned that growth will instead be driven by emerging markets and India is one of them.
Cost effective targeting of a specific audience, and accurate campaign tracking gives online advertising an advantage, especially when advertising budgets are tight.