Although total UK advertising spending is expected to increase by slightly less than the global rate, at 4.2 per cent this year - to $20.9bn – it is a significant improvement on the 1.4 per cent growth in 2011. The UK outperforms Europe as a whole, which is expected to grow by 3.7 per cent to $136.3bn in 2012.
Ed Barton, Strategy Analytics’ Director of Digital Media Strategies, explains, “Major global-impact events led by the Olympics, the US Presidential Elections and the European Football Championships as well as Japan’s continuing recovery from the earthquake combine to paint a brighter picture globally in 2012 for advertising spending overall. Furthermore we expect that total ad spend will surpass half a trillion ($500bn) dollars in 2014.”
Global advertising by media type
Looking at spend by media type reveals that global TV advertising is expected to grow by five per cent in 2012 to $188.5bn, equivalent to 40 per cent of all global spending. Global print advertising is expected to grow by half a per cent, accounting for a 26.4 per cent share. Other traditional formats including cinema, out of home and radio will grow by around four per cent.
In contrast, global online advertising is expected to grow 12.8 per cent to $83.2bn in 2012, accounting for 18 per cent of global ad spending.
Barton says, “Online advertising will continue along its growth trajectory fuelled by strong growth in emerging markets and increased spending volumes on social networking and online video advertising.”
UK/Europe advertising by media type
It is a similar picture in the UK with online advertising leading the way. Online is expected to grow by 10.6 per cent this year to $7.6bn compared to 0.7 per cent for TV, 0.3 per cent for print and 2.6 per cent for other traditional formats.
In comparison online advertising across Europe is expected to grow by 11.7 per cent this year compared to 3.4 per cent for TV and 2.4 per cent for ‘other traditional’ advertising. Print is expected to decline by 0.1 per cent.
Barton notes, “The UK is way ahead in terms of the share of spending generated by online - its share in the UK this year will be around 36 per cent compared to 20 per cent in Europe and 18 per cent globally. Furthermore, advertising spend on online has already overtaken print in the UK and is expected to do so in Europe and globally in 2017.”
Barton concludes, “Europe presents the sternest challenges to forecasting: structural macroeconomic issues based on unsustainable national and household fiscal deficits and the ever-present threat of a major shock in the form of a Eurozone default means that the region is one defining incident away from all forecasting outlooks effectively being rendered irrelevant in a single stroke.
However, assuming that the Eurozone can build its way out of the current uncertainty we are likely to see a situation characterized by some territories suffering a long term zero-to-negative growth environment where spending will remain very low (Spain, Greece, Italy, Portugal). Stronger Western European economies (UK, Germany, France) will grow slowly with the occasional fillip from one off drivers such as major sporting events. Growth, albeit from lower spending volumes, is likely to come from Eastern and Central Europe (Turkey, Russia) and the ongoing growth trajectory of online formats, in particular online video and social networking.”
About Strategy Analytics
Strategy Analytics says: “Strategy Analytics, Inc. provides timely and actionable market intelligence focused on opportunities and disruptive forces in the areas of Automotive Electronics and Entertainment, Broadband Connected Home, Mobile & Wireless Intelligent Systems and Virtual Worlds. Headquartered in Boston, MA, with offices in the UK, France, Germany, Japan, S. Korea and China, Strategy Analytics works with clients through annual multi-client services, management team workshops and custom consulting engagements.”
