UK internet advertising spend is forecast to grow 10.3% this year, accounting for more than a third of all UK ad spend, according to a new report.
Media buying network ZenithOptimedia raised its full-year forecast for internet growth from 9.3% to 10.3%, marking a rise of £200m.
UK internet advertising spend reachd £4.78bn in 2011 to account for 28% of total advertising spend in the UK, according to figures compiled by the Internet Advertising Bureau.
Steve King ZenithOptimedia worldwide chief executive saying: “Internet advertising continues to drive most of the growth in the UK ad market, and we expect it to attract 35% of expenditure this year, more than anywhere else in the world.”
However, ZenithOptimedia has gloomy predictions for other mediums, halving its TV ad revenue growth forecast for the UK in 2012.
In March, the firm said that it expected UK TV advertising revenue to increase by 1% but it has revised this and is now forecasting growth of 0.5%, amounting to £3.3bn.
This comes as the company also reduces its advertising forecasts for spending across western Europe, down from 2% to 1.5%, and across central and eastern Europe, down from 8% to 6.5%.
“The ad market slowed in April and May as advertisers became more cautious about the state of the global economy,” the company noted in a statement.
Overall, ZenithOptimedia’s revised spending for the UK upward, at 3.5%.
The media buying network’s revised forecast follows widespread concern that advertiser sentiment has failed to follow predictions of a “summer of love” for commercial broadcasters and other media owners from events such as the London Olympics.
Steve King, the ZenithOptimedia worldwide chief executive, said that the downgrade to TV ad forecasts was because of a decline in spending from retailers and fast-moving consumer goods companies.
ZenithOptimedia maintained its outlook for the UK newspaper industry of an overall 1.7% year-on-year fall in ad spend this year, while radio advertising is predicted to grow by 2.4%.
Outdoor advertising, expected to be a major beneficiary of spending around the London Olympics, is forecast to receive a 4.9% year-on-year boost – the most of any medium except the internet.
ZenithOptimedia also released a revised forecast for growth in global advertising spend of 4.8%, to $489bn.
Global forecasts- China and Indonesia see fastest growth
ZenithOptimedia has downgraded its global ad forecast, now expecting growth of 4.3% for the year instead of the previously predicted 4.8%.
The forecast for Western Europe was lowered to 1.5 percent, while Central and Eastern Europe dipped to 6.5 percent from last quarter’s forecast of 8 percent.
Overall Eurozone ad spending is expected to fall 1.1 percent in 2012, with declines of 5 percent in Italy, 10.4 percent in Portugal, 12 percent in Spain and 19.5 percent in Greece.
Adspend in Latin America and the Asia Pacific is expected to slow.
In Latin America, the forecast has been downgraded from 9.2 percent to 7.8 percent.
In the Asia Pacific, it’s down from 7.4 percent to 6.7 percent. The U.S. forecast is unchanged, at 3.6 percent, due in large part to it being an election year. Ad spend in Asia-Pacific remains robust, with strong growth in China and Indonesia helping to offset “sluggish” growth in other markets in the region, according ZenithOptimedia.
Japan’s continued resurgence following the 2011 tsunami will see the market’s ad spend grow by more than 3 per cent in 2012, giving a “significant boost” to overall ad spend in Asia-Pacific.
Thailand is also recovering well from its 2011 floods, bouncing back with ad spend predicted to grow by 9.1 per cent this year, it said.
Indonesia, South Korea, Thailand and India are predicted to each add between US$1 billion and US$4 billion to the global ad market and deliver another 15 per cent of global growth.
The Euro 2012 Football Championship has begun in Poland and Ukraine, with the Olympics happening in the U.K. in late July and August.
These events, together with the U.S. elections, provide a regular boost to global adspend every four years, known as the quadrennial effect.
This year ZenithOptimedia expect these events to add $6.3 billion to the global ad market.
The Internet is shown to be the fastest growing media, with ZenithOptimedia forecasting the segment to grow on average by 16 percent a year between 2011 and 2014.
The company expects TV ad dollars to continue to shift from the broadcast networks to the cable networks.
It predicts that broadcast TV revenues will be down 1 percent this year, while cable shows a 10-percent increase. Syndication spending will be off by 12 percent.
“As is going on in most industries at the moment, there is a bit of a flight to safety,” Jonathan Barnard, ZenithOptimedia’s head of publications, said.“Advertisers are withdrawing from the riskier ends of their investments and focusing on where growth is coming from. We don’t think the money from the eurozone is being spent elsewhere.”
In the longer-tem, ZenithOptimedia predicts that 60 per cent of all the world’s ad expenditure growth will come from developing markets—defined as those outside North America, Western Europe and Japan.
Looking ahead, ZenithOptimedia did not change its forecasts for 2013 and 2014. Global ad revenues anticipated to stand at $539bn by the end of this period