Worldwide Ad Spend Expected To Grow 6%

Worldwide ad spending will maintain a 6 percent growth rate for the next two years, climbing to $427 billion in 2006 and to $451 billion in 2007, according to Publicis Groupe’s ZenithOptimedia. That’s slightly better than the 4.8 percent growth to $403.6 billion that the agency estimates for full-year 2005.

U.S. spending growth will increase moderately over the next two years, per the forecast, climbing 5 percent next year to $174.8 billion and by an additional 4-plus percent in 2007 to $182.4 billion.

Overall, said Steve King, Worldwide CEO at ZenithOptimedia, “the top line numbers show real growth and are quite encouraging.” King will present the forecast in greater detail at today’s UBS Media Conference in New York.

While spending growth will remain strong, said King, a “slightly more troubling trend is where it’s coming from, and increasingly, it’s outside the core markets and media.”

King said that most of the growth over the next three years will be in “newer competitive markets such as the Asia Pacific, Latin America and Central Eastern Europe.” For example, he said that Brazil, Russia, India, Indonesia and China contributed about 8 percent of the global ad growth among the top 10 fastest-growing ad economies. Combined, they will account for 26 percent of growth in the sector by 2008.

Broken out by media, TV still holds a dominant 38 percent of global spending, but King says that share level has “plateaued” and “will struggle to hold its share” in the face of emerging media and ad-skipping devices like DVRs. “The big story is the Internet, which we now see as an $18 billion market globally,” with no signs of slowing growth, he said.

Zenith’s growth forecast for 2006 is in line with Interpublic Group’s Universal McCann’s 5.7 percent global ad spend prediction made back in June. Universal McCann will present an updated forecast this week, also at the UBS conference.