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Old 28th January 2008, 09:52 PM
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Advertising Climate - The Economist

....In fact, forecasters disagree about advertising spending in 2008. UBS, a bank, predicts that expenditure on ads will increase by 5%, whereas Goldman Sachs, a rival, forecasts that it will decline by as much as 5%. Most, however, agree on one thing: underlying growth in ad spending will come mainly from emerging economies and from advertising on the internet. Emerging markets now represent one-fifth of global expenditure on advertising, and are contributing ever greater sums. The price of ad-space has risen quickly in some emerging markets, such as Russia and China, and growth is slowing there. Even so, ZenithOptimedia expects developing countries will add $50 billion in new ad-spending in the next three years whereas developed markets will add only $38 billion—the first time that emerging markets have come out top over such a period.

In rich countries the internet is claiming a growing share of advertising—at the expense of traditional media, such as TV and print. There is still a gap between the time people spend online as a fraction of their media consumption (about a fifth) and the fraction of marketing budgets spent on the internet (about 7.5%). Many companies are trying to narrow the gap, which will sustain internet advertising during a downturn. Search advertising, the most effective kind of all, should be safest.

Indeed, some people say an economic slowdown is likely to accelerate the shift to the internet. Trevor Kaufman, chief executive of Schematic, an interactive agency based in Los Angeles which was recently bought by WPP, says that one of his clients, an American “big-box” national retailer, intends to devote more of its marketing resources to the internet as the economy slows. The internet's interactivity and wealth of product information make it the best means of generating short-term sales—whereas television is best for long-term brand-building. During a downturn clients see internet ads as easier to measure and hence easier to justify to shareholders, says Mr Kaufman.....

http://www.economist.com/business/di...ry_id=10567459
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Old 28th January 2008, 10:06 PM
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Re: Advertising Climate - The Economist

You mean this is actually going to get better?




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