BIPE and Lagardère Publicité have published the results of their latest Ad Barometer study

AD BAROMETER 2008: Advertising market growth forecast at 5.6%

• Growth will be driven by emerging countries and new media
• Traditional media will hold their own with an average change of +3.3%

BIPE and Lagardère Publicité have published the results of their latest Ad Barometer study, which forecasts a 5.6% increase in advertising spending in 2008 (vs. +4.3% last year) in the nine major markets followed on an annual basis (Germany, France, Italy, Spain, the UK, the US, Japan, China and Russia).

This growth can be explained by the dynamism of the Russian and Chinese markets (due to the 2008 Olympic Games) and by advertising growth of +5% in the US (due to the 2008 presidential elections).

Nonetheless, this growth conceals some sharply contrasting situations from one market to another.

In Europe and Japan, growth will remain modest. In France, it is estimated at +3.1% after a transitional year in 2007 (up 2.4%).

On the other hand, China will emerge as the fifth-ranking advertising power worldwide, ahead of France. As for Russia, it will maintain very high growth rates (with a 27% increase in 2008 versus 29% in 2007).

The contribution of the Internet will represent 50% of spending over all nine countries studied, and should even reach 60% in Europe.

In the face of this tidal wave, traditional media will see a more modest increase of +3.3% on average in 2008.

Although TV and display advertising should rise above this average, radio and magazines will fall below, with magazine advertising showing estimated growth of +2.2%, which reflects the real growth potential of emerging countries.

• The ranking per medium will thus be upset.
• Television will continue to be the leading medium in all countries, with the exception of Germany.
• The print media will take second place in terms of advertising spending, with contrasting situations: in Germany, they will reach close to 45%; in Russia, they will be in third place behind display advertising; while in the US, Japan and China, it is primarily a question of daily newspaper readership.
• Radio, often listened to in the car, has the advantage of being a highly mobile medium. Comparatively inexpensive and flexible as well as highly reactive, it nonetheless suffers in some countries from a decline in listenership, which can be partly explained by the rapid development of new listening resources (e.g. digital music players and podcasts).
• Display advertising has risen to the challenge posed by new technologies by banking on a qualitative improvement in billboards. This initiative should continue to draw advertisers and promote growth in display advertising’s market share.

The upward spiral of the Internet: a major phenomenon in recent years that has pulverized advertising spending distribution.

More and more sectors and advertisers (in the automotive, banking, insurance and consumer goods fields) are including the web in their media mix.

In the so-called ‘more mature’ countries (the US, the UK and Japan), the Internet continues to advance at an annual rate exceeding 20%.

The Internet will be worth 28 billion dollars in 2008 in the US, equivalent to Germany’s total advertising expenditure over the same year.

The Internet’s market share is currently greater than 10% on average, and should continue to grow.