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Last Updated: Monday, 6 December, 2004, 18:49 GMT
Ad spend to rise further in 2005
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Internet advertising could rise by as much as 25% next year
The amount spent on global advertising in 2005 will be higher than previously forecast, according to a number of the world's leading ad buyers.

Several agencies have upped estimates for spending, saying the industry has fully recovered from its 2001-2 slump.

This year's ad market was boosted by huge spending on the Olympics and the US Presidential election but underlying growth will continue unabated in 2005.

The internet will be the fastest growing advertising medium in 2005.

New products

Universal McCann, part of the Interpublic Group, has increased its 2005 growth forecast - not adjusted for inflation - from 5.9% to 6.1%.

It says overall ad expenditure will total $553.4bn (284.9bn) next year.

ZenithOptimedia - which is owned by the Publicis advertising network - has raised its own growth forecast to 5% from its earlier 4.5% estimate.

We are returning to a period of strong and stable growth
Jonathan Barnard, ZenithOptimedia
Separately, British advertising services giant WPP has expressed optimism about its future growth.

Chief executive Sir Martin Sorrell said on Monday that he expected the company's earnings per share to grow by at least 10% in 2005.

The agencies highlighted a greater willingness by companies to launch new products and stronger competition in the auto and pharmaceutical sectors.

"We are convinced that they [companies] are not going to turn around and cut all of their advertising budgets as their competition is heating up," said Robert Coen, senior vice president for forecasting at Interpublic.

Stable growth

Growth will be slower than in 2004 when the combination of the Olympics, the US Presidential election and Euro 2004 football tournament added up to $3bn to advertisers' budgets.

According to Zenith Optimedia, global expenditure is expected to grow by about 7% to $369bn this year.

2005 will represent the third year of consecutive growth in spending after a slump at the beginning of the decade brought about by the demise of dot com advertising.

Spending declined in 2001 and 2002 and grew marginally in 2003.

"We are returning to a period of strong and stable growth after the dreadful three years which followed the collapse of the dot com boom," said Jonathan Barnard, ZenithOptimedia's knowledge management manager.

Much of next year's growth will be fuelled by the internet, which is attracting more and more advertisers.

The amount spent on internet advertising is forecast to rise 25% in 2005, according to Universal McCann.

ZenithOptimedia says the medium will account for 3.9% of all spending, up from 3.6% this year.




SEE ALSO:
WPP cautious despite revenue jump
26 Oct 04 |  Business
WPP wins race to buy Grey Global
13 Sep 04 |  Business
Olympics boosts WPP growth
20 Aug 04 |  Business
ITV boosted by ad revenue growth
09 Sep 04 |  Business


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