LONDON – Television’s share of the world’s ad spend seems to be stalling at 38% says a new report released last week by media buyer ZenithOptimedia.
The company’s newest forecast reduces TV’s 2005 spend by $2.3 billion to $148.2 billion, with the bulk of this downgrade ($1 billion) coming in the States “where several big advertisers are reducing and redeploying TV budgets, says the report. (all figures in USD).
Japan’s projected TV ad spend is also off by a billion.
“TV’s share is stable in most developed markets, but may well have peaked in two notably large and mature TV advertising markets: the USA (37% in 1996) and the UK (33% in 1999). Newspapers took 40% of global advertising throughout the 1980s before declining to 30% today, where they seem to be stabilising. Based on ad revenue, TV has been advertisers’ favourite medium since 1995 but it may now be beginning a long newspaper-like decline,” reads the report.
Given that the report says ad spending overall is still outpacing economic growth around the world (increasing by 4.7% to $404 billion in 2005), if the money going to TV is declining, where is it headed? To the Internet, says the company.
“In this new forecast we revise $3.6 billion out of traditional media for 2005, but add $1.2 billion to the Internet. Our new Internet total for the year is up 8% to $16.4 billion since our last forecast, and this upgrade is sustained in 2006 and 2007. We have tended to underestimate Internet advertising, but even with this upgrade it is still only partly substituting traditional media. The Internet is not the only alternative destination for traditional media money, of course: in media planning, we identify up to 35 types of customer contact,” says the company.
It predicts radio ad spending to be stable, at around 8.5% of the total spend in 2005, or about $34 billion.
ZenithOptimedia is one of the world’s leading global media services agencies with 170 offices in 60 countries. Key clients include Alcatel, British Airways, General Mills, Giorgio Armani Parfums, Hewlett-Packard, Mars, Nestlé, L’Oréal, Procter & Gamble, Polo Ralph Lauren, Thomson Multimedia, Toyota/Lexus, Verizon, and Whirlpool.
