Publicis Groupe's ZenithOptimedia has revised and lowered its 2005 and 2006 global ad spending projections.
Zenith forecasts that worldwide ad expenditures this year will rise by 4.7 percent to $404 billion. In 2006, the agency forecasts ad spending to increase by 6 percent to $428 billion.
In April 2005, Zenith had predicted that ad spending would increase to 5.4 percent in 2005 and 6.5 percent in 2006. Therefore, the newly forecasted figures are down from the earlier predictions. Zenith reported that internet ad spending is increasing while TV expenditures have fallen or leveled off.
"Based on ad revenue, TV has been advertisers' favorite medium since 1995. But it may now be beginning a long newspaper-like decline," according to a Zenith company statement.
Zenith surmises that the ad dollars trimmed from TV will most likely be spent on internet ads.
"I'm not sure I would go so far as to say that TV is beginning to experience a newspaper-like decline. But what does seem evident is that advertisers of all kinds and sizes are beginning to realize that they can reach audiences they used to reach using television more efficiently online. Television is far from the next newspaper, but it can no longer be relied on to reach the same size audiences it used to effectively," says iMedia Connection Media Strategies Editor Jim Meskauskas.
Last month, Universal McCann tailored back its estimates for 2005 advertising spending growth, now predicting ad growth over 2004 to be up 5.7 percent in the U.S. and 5.9 percent overseas.
iMedia President Rick Parkhill comments, "The broadcast television bubble may not be bursting, but it has begun to leak significantly. Advertisers are only willing to pay more for less for so long. Increasingly, advertisers are discovering the accountable metrics and results that online advertising offers. This trend can only be expected to continue as online and other interactive media continues to mature and offer marketers excellent and measurable messaging opportunities."
Additional resources:
Universal McCann: Ad Spending Growth Forecast
Friday Fodder: The Week in Review