July 19th, 2010
Canadian Ad Spending on the Rebound
As media companies and publishers continue to recover from the recession and adapt business models for an ongoing digital shift, overall ad spending is on the rise, particularly in online and mobile, according to ZenithOptimedia.
ZenithOptimedia has upgraded its forecast for global ad spending growth from April’s forecast of 2.2% to 3.5%.
This is the company’s third upgrade in a row after six consecutive downgrades. North America is the region with the biggest upgrade of 2.8%. In the last forecast, the market was expected to shrink 1.5% this year, but is now pegged for 1.3% growth. Based on a strong Super Bowl and Vancouver Olympics in the first half of 2010, ZenithOptimedia’s report expects television to maintain its strong showing, while the continued decline of newspaper and spot radio ad revenue has slowed.
The report said Canada has bounced back from the recession much more quickly than its southern neighbour and is expected to grow ad spending by 5.4% this year, compared to 1.1% in U.S.
“Advertisers are spending again, now that consumers are opening their wallets,” states the Canadian summary. “Automotive is back; retail, finance, telecom, food, are all ratchetting up the demand.”
In 2008, total advertising expenditures in Canada reached a high-water mark of nearly $10.2 billion. By the next year, when the recession had its strongest hold on the economy, total spending was down 8.4% to $9.3 billion. ZenithOptimedia now projects total spending to hit $9.84 billion this year, rising to $10.2 billion in 2011 and $10.6 billion in 2012.
Ad spending on the Internet continues its climb, increasing its global market share from 10.5% in 2008 to 12.7% in 2009. In Canada, ZenithOptimedia predicts spending on Internet advertising to rise 13% this year and 12.7% next year when it will pass newspapers advertising ($2.2 billion online to $2 billion for newspapers) as the second most popular medium in the country behind only TV.
By 2012, ZenithOptimedia expects Internet spending to make up 17% of total ad expenditure worldwide, still two percentage points below newspapers. Since 1987 when they accounted for 40.6% of expenditure, newspapers have been losing share every year to reach 23% by 2009, and the report expects that number to fall further to 19.2% in 2012.
Paid search made up 50.2% of all Internet spending in 2009 and expectations are that it will get to 52.6% by 2012. Display’s contribution to total internet spend fell from 32.9% in 2008 to 31.9% in 2009. New formats such as web video, mobile and social media are expected to help display stabilize this year and increase its share of internet spend to 32% in 2012. In 2009, about $18 million was spent on mobile advertising, rising to $30 million this year, $55 million in 2011 and $92 million the year after that.
Eric Lifson is an Account Coordinator at Cossette Communications on the National McDonald’s account.
He holds an Honours degree in Communications Studies from York University and is a graduate of the Creative Advertising program at Seneca College.
He is passionate about his work and is constantly digging up the latest in advertising, marketing and digital/interactive media. Enjoy!
