Ad Projections - TV still Top, but Internet Overtakes Newspapers

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Analysts at Zenith Optimedia predict continued modest gains in ad expenditures in the U.S. for the next few years, with total ad spending up 2.2% this year and rising to 3.5% growth in 2013.  However, ad revenue growth in the U.S. will lag behind global averages (above 5% per year), and revenue growth is not uniform across media and industries.  In the TV field, they see 12% growth for advertising in cable TV, but ad dollars falling 2% for broadcast networks and 4% for syndication. The TV spot market will be particularly volatile, they suggest, with the added demand from political advertising and the Summer Olympics pushing ad revenues up 8% in 2012 (after 4% in 2011 and then falling to 2% in 2013).
Looking across industries, the forecast calls for continued decline in ad revenues for the Newspaper industry and for Magazine advertising revenue to stay near current levels.  All other major advertising media will show some growth, lead by online advertising (16.2 % in 2012 and 17.3% in 2013.  Between this level of growth and the continuing fall in Newspapers, they predict that Internet Advertising will overtake Newspaper advertising in 2013, making it the second largest advertising sector.
Advertising Expenditure By Medium (US$ Million, Current Prices Currency Conversion At 2010 Average Rates);  And Share Of Total Adspend

2009
2010
2011
2012
2013
Newspapers
96,973
23.0%
95,416
21.5%
92,802
20.2%
91,911
19.0%
91,334
17.9%
Magazines
43,633
10.5
43,741
9.8
43,224
9.4
43,060
8.9
42,909
8.4
Television
160,199
38.4
176,826
39.8
184,929
40.2
196,182
40.5
207,056
40.5
Radio
31,778
7.6
32,169
7.2
32,899
7.1
33,906
7.0
35,117
6.9
Cinema
2,107
0.5
2,315
0.5
2,423
0.5
2,564
0.5
2,718
0.5
Outdoor
27,774
6.7
29,917
6.7
31,503
6.8
33,357
6.9
35,122
6.9
Internet
54,683
13.1
64,026
14.4
72,531
15.8
83,457
17.2
96,392
18.9
Total *
417,147

444,410

460,311

484,436

510,648

Source: ZenithOptimedia, October 2011
All segments of Internet advertising are growing rapidly, but the biggest boom is likely to be driven by the increasing use of video ads and social media.-
Streaming video ads are growing extremely quickly, thanks to the emergence of do-it-yourself tools that have allowed local advertisers to enter the market. In most developed markets, social media sites are near the top of the list of most-popular websites, and they are often way ahead of their rivals in time spent by users.
Internet Advertising By Type (US$ Million, Current Prices Currency Conversion At 2010 Average Rates)
Ad Type
2009
2010
2011
2012
2013
Display
$18,349
$21,875
$25,282
$29,713
$35,218
Classified
9,911
10,950
11,990
13,078
14,246
Paid search
26,423
31,202
35,259
40,666
46,928
Total
54,683
64,026
72,531
83,457
96,392
Source: ZenithOptimedia, October 2011


In general, the report suggests that the response of the advertising market in recent years is similar to how it responded to earlier stock market crises, with lowered growth until economic recovery.  The extended nature of the current economic turmoil is extending that period, resulting in contractions in predicted growth rates in the near term rather than triggering a collapse.  While the US is experiencing slower growth rates, it remains the dominant advertising market at more than three times the size of the second largest (Japan), and due to that size differential, it will remain the largest advertising market for a while.  Similarly, the TV ad market dominates the U.S.advertising market, and is likely to do so for some time, although the Internet sector looks to challenge TV for supremacy down the road.

Sources - Television Still the Big Bucks Leader in Ad Spend Through 2013, Research Brief
Zenith Optimedia press release