ZenithOptimedia Forecasts Ad Revenue Drop in 2010

Mild recovery predicted for mid-next year

By Claire Atkinson -- Broadcasting & Cable, 7/6/2009 1:22:55 PM

Ad spending on major media in North America will continue to fall in 2010 to $158.7 billion, down from a projected $162.7 billion in 2009, according to the latest forecast from global ad agency ZenithOptimedia. The decrease is forecasted to be the third year of declines in the region before an upturn in 2011. The firm sees a mild recovery occurring mid-next year due to events such as the Winter Olympics, FIFA World Cup and U.S. mid-term elections.

The agency reports that while some ad spending categories have cratered - business travel, autos and financials - others such as consumer goods, retail and value products are holding up better than predicted. For instance, General Mills has said it will increase ad spending as a way to gain share from rivals. A release Monday said the second quarter was not as difficult as the first quarter and that signs are emerging that the downturn is ‘approaching its nadir.’ Even so, global ad spending will fall 8.5% in 2009; the projection is a downwards revision from a 6.9% decline cited in April by the agency. Separately, China is predicted to become the fourth-largest ad market in 2009, overtaking the U.K.

Globally, television is expected to boost its ad coffers next year; moving up from $173.6 billion in 2009 to $179.5 billion. Television’s share of the ad pie will grow from 38.6% to 39.2% by 2011, according to the ZenithOptimedia report.