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International: 2008 Ad Barometer study - advertising market up by 5.6%

Growth driven by emerging countries and the new media
Good performance from standard media with an average rise of +3.3%

The economic analysis and consultancy firm BIPE and Lagardère Publicité have published the results of their latest Ad Barometer study. This predicts growth of 5.6% in advertising investments during 2008 (compared with 4.3% the previous year) in the nine major markets monitored annually (Germany, France, Italy, Spain, the UK, the United States, Japan, China and Russia).

This growth is explained by dynamic markets in Russia and China (the year of the Olympic Games) and a 5% increase in advertising in the United States (the year of the presidential elections).

However, this development conceals situations that are very different from one market to another.

In Europe and Japan, growth will remain relatively low. In France, it is estimated at +3.1%, after a transition year in 2007 at +2.4%.

However, China will emerge to become the 5th biggest advertising power in the world, ahead of France. Russia, meanwhile, should maintain high growth rates: +27% in 2008 compared with +29% in 2007.

The Internet’s contribution, amounting to 50% in all nine countries studied, looks set to achieve as much as 60% in Europe.

In the face of this tidal wave, the classical media will post a lower rate of growth: +3.3% on average in 2008.

While TV and billposting should achieve higher rates than this average, radio and magazines are expected to fall below it, with the magazine press posting a rise estimated at 2.2%, reflecting the real growth potential of emerging countries.

The “pecking order” with each media will thus be disrupted.

Television will remain the top medium in all countries except Germany.

The press will come second in terms of advertising investment, though with a varying situation in each country: in Germany, it will be close to 45%; in Russia, it will lie third, after billposting; in the USA, Japan and China, it will manifest mainly in the daily press.

Radio, the “traffic” medium, has the advantage of being part of the growth mobility trend. However, while radio is less expensive, more flexible and highly reactive, its audiences are on the downturn in some countries due to the rapid expansion of new listening habits (personal stereos, digital equipment and podcasts).

Billposting has risen to the technology challenge by focusing on the quality and improvement of advertising panels. These initiatives should continue to attract advertisers and foster growth in the billposting market share.

The main phenomenon over the past few years, which has demolished the usual advertising investment spread, is the Internet’s significant rise in power.

An increasing number of sectors and advertisers (automobile, banking, insurance and mass distribution) are integrating the Web into their media mix.

The Internet is continuing to progress in so-called “mature” countries (the USA, UK and Japan), with an annual growth rate of more than 20%.

In 2008, the Internet will represent 8 billion in the USA: the equivalent of the total advertising expenditure in Germany for the same year.

The Internet’s market share is now 10% on average, and looks set to rise still further.

Source BIPE and Lagardère Publicité/France. Mailed 2007-12-13

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