Transcript Outlook for Advertising Expenditure the Global Perspective

Outlook for Advertising
Expenditure:
Global Perspective and
Internet growth vs other media
Nick Hiddleston
Worldwide Research Director
ZenithOptimedia Group
24 May 2006
Contents
•
Introduction to ZenithOptimedia and the company’s research
•
Research methodology
•
Market situation for advertising expenditure
•
Details of USA ad expenditure market
•
Internet versus other media evolution
•
Forecast for the next three years
•
Summary
Introduction
•
Zed digital is the digital company of ZenithOptimedia Group. We
provide our clients with interactive marketing services, display
advertising and performance marketing, such as: search engine
marketing, affiliation, e-mailing, mobile.
•
ZenithOptimedia is one of the world’s leading global media
services agency, with 170 offices in 60 countries that plan and
buy campaigns.
•
Our positioning is The ROI Agency, focusing our propositions on
the tracking for all marketing actions.
•
ZenithOptimedia is a media agency rather than a research
company. The company is focused on research as a fundamental
value for its clients.
•
For many years ZenithOptimedia has published regular studies
into Advertising Expenditure Forecasts
Research methodology
•
The offices provide historical ad expenditure figures from the
most reliable source or sources in their countries.
•
The offices provide their forecast for the next three years of
growth. It is not a modelled forecast, but is made by experts
based on local market conditions, their clients’ and their
competitors’ ad expenditure.
•
The figures are as net as possible. Discounts, agency
commissions and production costs are excluded, with the
exception of some countries that are gross figures.
•
Figures are quote in current prices are nominal figures. All data
are converted into US dollars at an average annual exchange
rate.
Stable growing world economy
Gross Domestic Product: year-on-year % change in constant prices
10
9
2004
2005
2006
2007
8
7
6.5
6
5
4
5.8
5.5
5.3 5.4
4.7
3.9
4.1
3.5 3.6
3.9
3.4
3.5 3.7
2.6 2.5
3
2.0
2
1.3 1.4
1.7
1
0
WORLD
Source: Various
N.America
L.America
W. Europe
Asia Pacific
Global adspend and GDP growth
Year-on-year % change, current prices
12
GDP
Adspend
10
8
6
4
2
0
-2
-4
-6
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
Source: ZenithOptimedia
Adspend by medium (1995-2008)
US$ million, current prices
Internet
Outdoor
Radio
Television
Magazines
Newspapers
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
500,000
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
Source: ZenithOptimedia
USA Adspend by medium (1995-2008)
US$ million, current prices
Internet
Outdoor
Radio
Television
Magazines
Newspapers
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
200,000
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
Source: ZenithOptimedia
Growth in adspend by medium
% change 2008 v 2004, current prices
120
100
80
60
40
20
Source: ZenithOptimedia
TOTAL ex
internet
TOTAL
Newspapers
Radio
Magazines
Television
Outdoor
Cinema
Internet
0
USA Growth in adspend by medium
% change 2008 v 2004, current prices
90
80
70
60
50
40
30
20
10
Source: ZenithOptimedia
TOTAL ex
internet
TOTAL
Newspapers
Radio
Television
Magazines
Outdoor
Internet
Cinema
0
Market share by medium
2008
2004
Outdoor
5.8%
Cinema
0.4%
Internet
3.7%
Radio
8.7%
Television
37.6%
Source: ZenithOptimedia
Newspapers
30.2%
Outdoor
Cinema 6.3%
Internet
6.4%
0.4%
Newspapers
28.2%
Radio
8.2%
Magazines
13.6%
Magazines
12.9%
Television
37.6%
USA Market share by medium
2008
2004
Outdoor
Internet
Cinema 3.3%
5.4%
0.2%
Radio
12.6%
Television
34.4%
Source: ZenithOptimedia
Newspapers
30.1%
Internet
Outdoor 8.0%
Cinema
4.1%
0.3%
Newspapers
28.3%
Radio
11.9%
Magazines
14.1%
Television
32.6%
Magazines
14.8%
Global online advertising (2005-2009) *
US$ million, current prices
* financial year to June
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2005
Display
2006
Search
2007
Classified
Source: MSN International/ZenithOptimedia
2008
Email
2009
Mobile
US new media marketing (2005-2009)
US$ million, current prices
1,600
1,400
1,200
1,000
800
600
400
200
0
2005
2006
Video game
Source: eMarketer, Inc
2007
2008
Broadband video
2009
Fastest-growing adspend markets
% change 2008 v 2005, current prices
90
80
70
60
50
40
30
20
Source: ZenithOptimedia
Lithuania
India
Brazil
Saudi/Pan
Arab
Hungary
Vietnam
Bulgaria
China
Indonesia
0
Russia
10
Biggest contributors to adspend growth
2008 v 2005, US$ million, current prices
30,000
25,000
20,000
15,000
10,000
Source: ZenithOptimedia
Spain
India
Italy
Indonesia
Brazil
UK
Russia
Japan
China
0
USA
5,000
USA: adspend forecasts (1)
(at current prices)
10
9.0
2005 v 2004
8
7.0
5.3
6
4
% 2
2006 v 2005
3.0
3.0
3.0
3.0
2.8
2.0
1.0
1.0
0
-2
Netwrk TV
Local TV
-4
-6
-6.0
-8
Source: ZenithOptimedia
Cable TV
Syndication TV
Netwrk
radio
Local
radio
USA: adspend forecasts (2)
(at current prices)
25
2005 v 2004
22.0
2006 v 2005
20
18.0
15.0
%
15.0
15
10.8
10
8.1
5.0
5.8
5
3.5 3.0
0
Mags
Newsprs
Source: ZenithOptimedia
Out-of-home
Internet
Cinema
Internet vs other media
• North America was the most internet-developed region in
terms of ad expenditure in 2004:
- North America
5.4%
$8,968 Million
- Europe
2.4%
$2,507 Million
- Asia Pacific
3.1%
$2,408 Million
• The Top 5 countries for internet ad spend in 2004 were:
- Sweden
7.7%
$171 Million
- US
5.4%
$8,688 Million
- UK
5.2%
$1,072 Million
- Denmark
4.9%
$96 Million
- Japan
4.2%
$1,677 Million
Source: ZenithOptimedia
Internet vs other media
• Central European countries were not at the front of internet ad
spend in 2004
- Netherlands
1.8%
$82 Million
- France
1.8%
$222 Million
- Germany
1.7%
$337 Million
- Spain
1.5%
$117 Million
- Italy
1.3%
$138 Million
• New emerging countries on Internet ad expenditure in 2004
are:
- Israel
3.9%
$30 Million
- Taiwan
3.4 %
$59 Million
- Latvia
3.4%
$.,7 Million
- Estonia
2.9%
$2 Million
- Brazil
1.7%
$77 Million
Source: ZenithOptimedia
Evolution of the most important markets
Brazil has to accelerate its online investment
12%
11%
10%
9%
8%
7%
6%
5%
4%
3%
2%
Brazil
1%
0%
94
95
UK
USA
Source: ZenithOptimedia
96
97
98
Sweden
South Korea
99
00
01
02
Australia
Canada
03
04
05
06
Japan
Denmark
07
08
Israel
Taiwan
Summary
•
Traditional ad expenditure continues tracking or exceeding
world economy. Global ad expenditure grew 4.8% in 2005 vs
2004 and will grow 5.9% in 2006, 5.7% in 2007 and 6.0% in
2008
•
Brazil, Russia, India, Indonesia and China represent about 8% of
global advertising but supply 30% of the growth in 2005 and
33% of growth to 2008
•
Digital television and DVRs threaten to undermine the free TV
model in the developed world
Internet Summary
•
The internet ad market is $18bn now (total 2005), and search
advertising will help it reach $30bn in 2008
•
Internet will take 4.6% of advertising spend in 2005 rising to
6.4% forecast in 2008
•
From 2005 to 2008 internet will create US$ 16 billion, 17% of
the total ad growth over this four year period
•
Sweden is the leader, the internet already accounts 8% and is
forecast to rise to 12%
•
In 2009 Global online advertising will see a 60% increase from
2005 and will have doubled since 2004
Thank-you for your attention
Nick Hiddleston
Worldwide Research Director
[email protected]