Ad Projections - TV still Top, but Internet Overtakes Newspapers

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