Internet adspend holds up better than predicted
LONDON - Global internet advertising will grow 10% this year, achieving a 15.1% share of global ad expenditure by 2011 with search leading the way, according to ZenithOptimedia.
ZenithOptimedia said that internet advertising has held up even better than it predicted three months ago as its transparency, accountability and flexibility have made it more attractive than ever in a recession. The internet is the only medium it expects to grow in 2009.
The Publicis Groupe-owned media agency is forecasting internet ad expenditure to grow 10.1% globally in 2009, ahead of its 8.6% prediction in April.
By 2011 it expects it to account for 15.1% of all ad expenditure, up from 10.5% in 2008. It says that most of this growth will come from paid search, which has proven an ideal method of reaching consumers looking for bargains.
In the US, ZenithOptimedia predicts search advertising to grow 20% in 2009, while traditional display grows 3% and classified grows just 1.8%.
It added that Microsoft's launch of its new search engine -- Bing -- provides welcome competition to Google and should spur further innovation in search.
The good news for online advertising comes as ZenithOptimedia downgrades its global adspend forecast for 2009 from -6.9% to -8.5% and relegates the UK behind China, which will this year overtake the UK to become the fourth largest ad market.
It cut its global adspend forecast for 2009 after the first quarter came in below predictions and said the downward slide in advertising continued in the second quarter, but at a slower pace.
ZenithOptimedia said its predictions for the rest of the year held steady as signs continue to emerge that the downturn is approaching its lowest point.
It is predicting mild global recovery in 2010, which it says will be helped by the Winter Olympics, Fifa World Cup and US mid-term elections.
The company said that North America will suffer a third year of decline in 2010 while Western Europe stagnates.
It is predicting a faster return to growth in Asia Pacific, Central & Eastern Europe, Latin America in 2010, followed by North America and Western Europe in 2011.
Not every market is in decline this year. Of the 79 markets it covers, 25 are still growing.
Many of these are small, young markets, but they also include heavyweights like India and China, which it is forecasting to grow 5.4% this year and overtake the UK to become the world's fourth-largest ad market.
India is growing at 7.7% and will overtake Norway, Mexico and the Netherlands to become the 14th largest.
ZenithOptimedia forecasts newspapers will continue to shrink. The newspaper ad market will contract, it said, every year over its forecast period, falling to 22.7% below its 2007 peak in 2011.
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