A key advertising forecaster said Monday that global ad spending shows signs of reaching bottom, as some sectors held up better than expected during the second quarter.
Although ZenithOptimedia, a unit of French advertising conglomerate Publicis Groupe, slashed its 2009 spending estimate for a second time this year, the forecaster now expects a mild recovery next year and a stronger rebound in 2011.
As expected, ad spending fell steeply in finance, automotive and business travel. But sectors such as retail and consumer goods have performed better than projected, and ZenithOptimedia said year-over-year ad spending in the second quarter fell at a slower pace than the prior quarter.
"The second quarter was not as tough as the first quarter," ZenithOptimedia said in a report. "We have held our expectations for the rest of the year steady, as signs emerge that the downturn is approaching its nadir."
ZenithOptimedia said Monday it now expects worldwide ad spending to fall 8.5 percent to $456.5 billion. In April, after first-quarter results fell below expectations, ZenithOptimedia had slashed its forecast to a decline of 6.9 percent, sharper than the 0.2 percent drop it had projected in December.
Nearly one-third of the 79 markets covered by ZenithOptimedia still show growth this year, with China and India as the heavyweights among those mostly younger and smaller growth regions.
Ad spending in China is expected to rise 5.4 percent in 2009, overtaking the United Kingdom for the first time as the world's fourth-largest ad market. India is forecast to gain 7.7 percent, passing Norway, Mexico and the Netherlands to rank as the world's 14th largest.
The outlook isn't as cheery for most of the rest of the world this year, with the worst performance expected in North America, Europe, Africa and the Middle East.
In the U.S., ad spending for TV, radio, magazines, newspapers, outdoors and the Internet is expected to fall 10.6 percent to $154 billion, the lowest level in six years.
Once again, U.S. ad spending for newspapers is expected to fall most steeply, down 20 percent to $35.2 billion this year as advertisers increasingly migrate to free or lower-cost alternatives online. TV ad revenue is projected to decline 8 percent to $53.3 billion, and radio by 14.4 percent to $16.5 billion.
In the U.S., Internet advertising is expected to increase 12.6 percent to $22 billion. Paid search ads should account for most of the growth in Internet ad expenditures, forecast to increase by 20 percent.
Globally, Internet ad spending is the only media expected to grow this year. ZenithOptimedia raised its forecast for 2009 Internet spending growth to 10.1 percent, up from 8.6 percent in April. By 2011, Internet ad spending should comprise 15 percent of all ad expenditures, up from 10.5 percent last year.
"Its familiar virtues of transparency, accountability and flexibility have proved even more attractive in a recession than ever," ZenithOptimedia said.
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