The Mayans predicted 2012 would bring the end of the world. For publishing executives, it could merely be the end of an era.
Three reports issued on Monday by global media-buying firms project that traditional print media will see their long-held No. 2 position for advertising revenue usurped for the first time in 2012 by the Internet. While television remains the most popular medium for advertisers, the Web and mobile sectors are in the midst of explosive growth, eclipsing newspapers and magazines, which are expected to drop 2 per cent over the next three years.
The gloomy forecast for the old-fashioned segment of the news business partly overshadows a renewed optimism across the advertising industry, which is eyeing a worldwide outlay by marketers next year of almost $502-billion (U.S.), according to a 70-country survey by GroupM. That's an increase of 5.8 per cent over 2010.
ZenithOptimedia and Magnaglobal, which both peg current ad spending at lower levels than does GroupM, predict it will take until 2013 and 2016, respectively, for worldwide revenue to leap over the half-trillion-dollar mark.
The report presentations kicked off the three-day UBS Media and Communications Conference in New York.
GroupM is predicting Internet advertising will contribute 37 per cent of the industry's global growth, hitting an estimated $82-billion next year. The sector has expanded 70 per cent since 2007, even through the recession-induced ad slump.
While the Internet is thumping its chest, some traditional media sectors that have invested in technology are proving surprisingly resilient. Out-of-home advertising (such as billboards and other street-level displays) is expected to benefit from new digital signs and interactive displays that engage pedestrians. Meanwhile, cinema chains are extracting higher premiums as they pull in a steady stream of audiences for ads shown before 3-D movies, including a greater number of 3-D commercials.
In one sign of the growing bullishness for transformed traditional advertising platforms, Astral Media recently announced it is expanding its network of light-emitting diode digital signs to 32 from 23 in Toronto, Montreal and Vancouver, even as it cuts back on billboards mounted on the sides of buildings. The LED digital displays allow advertisers to tailor their messages to changing conditions. A ski resort might trumpet good snow conditions, for example, while a fast food restaurant might offer different meal promotions during the morning and evening rush hours, while enabling the sign company to rotate through numerous advertisers on the same display.
While television audiences are increasingly splintered, the overall TV advertising market is benefiting from the use of personal video recorders and more large-screen high-definition TVs, which attract more eyeballs to commercials. ZenithOptimedia projects television's share of the ad market, which flagged at 37.1 per cent in 2005, will grow to 41.8 per cent in 2011 from 40.7 per cent this year.
The renewed confidence in TV helped drive next year's edition of the Super Bowl to sell out its ad time three months in advance, even at record prices.
While the United States remains the largest ad market in the world, with about 36 per cent of global spending, the numbers provide a stark illustration of why advertising agencies trying to recover from the recession have been expanding into developing markets. Between 2010 and 2013, ZenithOptimedia expects growth of 26 per cent in Latin America, 31 per cent in Central and Eastern Europe, and 36 per cent in Asia-Pacific (excluding Japan). North America and Western Europe, meanwhile, are looking at 9-per-cent and 10-per-cent growth, respectively, over the same period.
Unless something drastic changes, Canada will also be locked out of the bounty: Magnaglobal expects annual growth here over the next three years to average 3.8 per cent.
Simon Houpt