Online and TV to fuel '08 ad spending growth
By Erina Lin, Tuesday 29 January 2008 at 21:45 :: Advertising :: #1168 :: rss
Despite many downward ad forecast revisions, and concern over an economic recession, WPP's GroupM unit released a report calling for relatively healthy growth in the worldwide ad economy in 2008, Media Post reported.
The report pointed out that this year, growth in the U.S. marketplace will rise 3.7 percent due mainly from two factors: cyclical stimuli, such as the Olympics and presidential elections, and increased ad spending on the Internet. Without the incremental effects of the Olympics and election spending, U.S. ad spending would increase only 1.8 percent in 2008. Without the effects of the Internet, the U.S. ad market would rise only 0.6 percent, and would leave it at almost the same as it was in 2007.
"We have been bearish on the USA since we started publishing these forecasts in 2006: soft house prices trumped strong profits. Demand for traditional media appears to have anticipated the current global slowdown," GroupM Futures Director Adam Smith states in a new report, according to Media Post.
Although the Internet is surging in growth, it will still be ranked the second largest contributor, accounting for only one-third of global ad spending growth, while TV, with its much larger base and strong growth in developing countries, will make up half of the incremental ad spending in 2008. Worldwide ad spending is projected to rise 6.8 percent this year, according to GroupM.
"We estimate that measured Internet will occupy 10 percent of global media investment in 2008 and contribute 28 percent of growth. Internet revenue is still conventionally reported as a single figure encompassing display, search, classified and sometimes a small amount of e-mail. But it is misleading to treat this as a single medium. In particular, we would prefer to isolate search, which is mainly used for direct marketing, from display. They serve different advertisers in different ways and require different management,” said Smith, according to Media Post.
"Search is the largest component of Internet spending (we estimate 60 percent worldwide) and the fastest growing component as well: it is thus the biggest contributor to media revenue growth in the developed world,” he added.
Noting that search ad spending will "stabilise sooner or later," online display advertising will keep on accelerating, especially as marketers begin exploiting rich media and online video advertising formats, which blur the line between branding and direct ROI marketing strategies.
"The overlap between the two will grow too, as display advertisers embrace search techniques to complement their traditional advertising, and vice-versa. A large part of Internet display already invites direct response," Media Post reported.
Comments
No comment.
Post comment