NEW YORK - Global advertising expenditures will return to pre-recession peak levels this year, but the U.S. will take several years to return to its peak performance, media planning and buying firm ZenithOptimedia predicted Tuesday.
"While the U.S. economy is on the road to recovery, overall performance is lackluster," ZenithOptimedia said. "Although recovery will continue, the economy has still not returned to the level it was at before the recession, and neither has advertising spending." And it added: "Overall advertising expenditure will not reach [peak] levels for several years yet."
Assuming current growth rates continue, the U.S. ad market is unlikely to reach the 2007 spending level of $177.7 billion until 2015 or 2016, according to Jonathan Barnard, head of forecasting at ZenithOptimedia.
Beyond economic factors, such as high unemployment and high gas and grocery prices, the firm also cited traditional media that are "struggling to reach new consumers and, as a result, are losing revenue."
Lowering its growth forecasts for several key regions, including the U.S., but increasing its outlook for Asia, the company now projects global ad spending will reach $471 billion for all of 2011, on par with the peak level reached in 2008 and up 4.1 percent from 2010 - just slightly below the 4.2 percent gain that the company had predicted in April.
Zenith, which is part of advertising giant Publicis Groupe, cited a softening in the Americas and Europe, counterbalanced by stronger growth in the Asia Pacific region, where it eyes a 2011 improvement of 5.9 percent compared with 4.6 percent previously, as reasons for its slightly changed outlook.
"This is partly because the earthquake in Japan has been less disruptive than initially feared," said Zenith, which expects Japan ad spending to drop 2.4 percent this year, better than its previous estimate for a 4.1 percent decline.
For the U.S., Zenith is now projecting a 2.1 percent ad gain in 2011 to $154.9 billion from $161.7 billion last year, down from its 2.5 percent
growth forecast previously. The firm predicted the largest increases this year to come in Internet advertising (12.6 percent), cable TV (10 percent) and cinema (6 percent).
"As we move further past the recession, we expect larger increases of 3.5 percent in 2012 [to $160.3 million] and 3.2 percent in 2013," it said. "Although recovery will continue, the economy has still not returned to the level it was at before the recession, and neither has advertising spending. It will take several years for advertising spending to reach the level it was at in 2008."
Overall, the global ad market "continues to recover from the 2009 recession, but growth has dipped this year in response to economic pressures, natural disaster and political disruption," Zenith said. It predicts "more robust growth" in 2012 and 2013.
A big change in its forecast is for the Middle East and North Africa region, where Zenith now forecasts a decline of 12.1 percent in 2011, a clear reversal from its previous forecast of 0.1 percent growth. "The political turmoil has spread further, and advertisers have continued to pull campaigns in the three relatively large ad markets that have been engulfed in this turmoil - Bahrain, Egypt and Oman, as well as cutting back their exposure in pan-regional media," the firm said. "On the upside, we now predict an 8.9 percent rebound in 2012 (compared to the 4.8 percent we predicted in April) on the assumption that the political situation in the region stabilizes."
The Middle East and North Africa accounts for only 1 percent of global ad spending.