Ad Market Headed for Small Recovery in 2010

The global advertising market is set for a mild recovery in 2010 according to a forecast by leading media agency ZenithOptimedia cited by Reuters. Following an expected drop of 8.5 percent for the whole 2009, the market will gain a modest 1.6 percent next year. This year is bound to be a low point for the global ad market as well as Internet advertising with the latter dropping 5 percent in revenue in Q1 2009 compared to the same period in 2008.

Previous estimates by the company put the decline at 6.9 percent for 2009 but worse-than-expected results for the year so far have made it revise its forecast, predicting a gloomier 8.9 percent decline year over year. Broken down, the only segment set for growth this year is online advertising, with income expected to grow 10.1 percent over the whole year, while TV, cinema and outdoor will have a smaller decline than the overall market. Online advertising is also expected to take an even larger share of the market rising to 15.1 percent in 2011.

The biggest expected growth is for search advertising, which will rise 20 percent in the US this year according to the forecast. Meanwhile, display advertising will rise just 3 percent and classifieds a meager 1.8 percent. The newspaper industry will continue to take a pounding with an expected decline of 14.7 percent, as major business sectors, finance, auto and other traditionally big spenders had much lower advertising budgets this year.

Internet advertising saw its biggest drop in history this year, falling 5 percent in the US with revenue of just $5.5 billion. The newspaper ad market was hit the hardest, dropping 28.28 percent in Q1 year over year, with a $2.6 billion revenue loss. The second quarter of 2009 is also expected to be better than Q1, with a smaller drop in revenue, and the whole outlook is more optimistic as the economic downturn seems to be changing course.