APAC ad spend to grow at 23 per cent for the next three years : Zenith Optimedia

According to an adspend forecast by Zenith Optimedia, steady recovery in global ad expenditure will continue for at least three years.

“The key result of this update is the continued rise of developing markets and digital media, and their central role in driving global growth,” said Steve King, Zenith Optimedia’s worldwide CEO.

“In fact the importance of the internet is under-represented in these figures," says King. "Advertisers are investing a lot more in owned and earned media, where their activities do not count as ad expenditure in the traditional sense.”

Zenith Optimedia now estimates global ad expenditure will have grown 4.9 per cent by the end of 2010. Ad expenditure has recovered more rapidly than expected in every region this year, as advertisers regained some of their confidence after an alarming 2009.

"Corporate profitability has rebounded, and many companies have built up large reserves of cash, leaving them in a much more secure position to invest for the future. We forecast the recovery in ad expenditure to continue at a steady pace over the next three years, with 4.6 per cent growth in 2011 and 5.2 per cent growth in both 2012 and 2013," said a company statement.

There are certainly risks to the recovery, notably high debt in the developed world (both private and public), persistent unemployment in the US, fears of defaults in the Eurozone, and cuts in government spending.

"Until advertisers are fully confident that the economic recovery will be sustained, we expect growth to remain below its long-term trend rate of six per cent," added Zenith Optimedia's regional development director for APAC, Matt Semple.

In recent years there has been a big difference between the growth rates of developed and developing markets, and Zenith Optimedia expects this to continue, caused by the much stronger economic growth of the developing markets.

Between 2010 and 2013, it forecasts Japan to grow by five per cent, North America to grow by nine per cent and Western Europe to grow by 10 per cent. Meanwhile Zenith Optimedia forecasts Latin America to grow by 26 per cent, Central and Eastern Europe by 31 per cent, Asia Pacific by 23 per cent, and Asia Pacific excluding Japan to grow by 36 per cent.

The rest of the world (primarily Middle East and Africa) will grow by 24 per cent. Developing markets – defined here as everywhere outside North America, Western Europe and Japan – will increase their share of the global ad market from 31.5 per cent in 2010 to 35.9 per cent in 2013.

The world’s current top ten ad markets divide into four broad groups. Japan is forecast to grow only five per cent between 2010 and 2013, dragged down by deflation and huge public debt.

The US and the big markets in Western Europe (France, Germany, Italy and the UK) are forecast to grow a disappointing seven to nine per cent over the period, held back by concerns over debt, unemployment and government spending.

Australia and Canada did well during the downturn, thanks partly to strong trade links with Asia-Pacific, and will grow a much more substantial 15 to 17 per cent. The ‘emerging’ markets of Brazil and China will grow 31 to 51 per cent respectively.

Its rapid growth means China will overtake Germany to become the world’s third-largest ad market in 2011, and stay at that position throughout the forecast period. China is currently just over half (52 per cent) the size of Japan, the second-largest ad market, and will be three-quarters (76 per cent) of its size in 2013.

Russia will enter the top ten in 2012, leapfrogging Australia and Canada to take ninth place, and then overtake Italy to take eighth in 2013.