Global ad spend growth downgraded to 4% in 2013: Warc

Wednesday, 28 November 2012 01:48 - - {{hitsCtrl.values.hits}}

Global advertising spend is expected to increase by 4.3% in 2012 and by 4% in 2013 according to marketing intelligence service Warc’s latest International Ad Forecast, which is based on 12 major markets.

The figures are a downgrade of 0.5 percentage points (pp) and 1.5 pp respectively from the firm’s June report. The reduction in forecast growth for advertising spend next year is a reflection of the continued uncertainty about the global economy and future business conditions, according to Warc.

Based on Nielsen ad figures, global ad spend in 2011 totalled $498 billion. When Warc’s growth estimates are applied to this base sum, 2012’s ad spend is expected to be around $519 billion and 2013’s to be nearly $540 billion.

Warc also calculates growth based on forecast inflation, in which case, global ad spend is expected to rise by just 1.8% this year and by 1.6% in 2013.

Of the 12 major markets the research firm analyses, four (Australia, China, India and Japan) are in Asia-Pacific. For these markets, Warc expects China to lead in 2013 with growth of 12.5%, followed by India with 9%, Australia with 2.6% and Japan with just 1%.

Japan’s growth is expected to be limited due to fears of further economic recession, according to Warc.

Globally, Russia is expected to the fastest growing ad market in 2013, with 14.6%, followed by China (12.5%, as above) and Brazil (9.5%).

The US, the world’s largest ad market, with predicted revenue of $153 billion in 2012, is expected to expand at a slower rate of 2.5% next year from a predicted growth of 4.1% this year, without the benefit of election and Olympic spend.

“The global ad market has been boosted this year by quadrennial events, namely the Olympics, the US presidential election and, to a lesser extent, Euro 2012,” observed Suzy Young, data editor at Warc.com. “Next year will suffer by comparison, with advertisers having fewer incentives to spend when the underlying mood is generally one of caution.”