Advertising world hit by economic slowdown

The downturn in the economy across the world has resulted in a revised and less hopeful forecast in the world of online advertising, with the economy in the US, Europe and China having a particular influence on the situation.

Carat, the biggest media buyers in Europe, stated that while online advertising will continue on its growth path during 2008, it will be at a slower rate of climb than experienced in 2007. The prediction goes on to say that 2009 will experience a similar trend.
    

Online advertising overtakes radio

The internet is about to eclipse radio as the third most popular advertising medium across the world, with television retaining top spot and the newspaper and magazine method remaining in second place.

ZenithOptimedia, a rival top Carat, also forecast a slowdown in the trend but re-iterated that funding given over to online advertising would soon eclipse that directed to radio.

Many newspaper companies are feeling the pinch, too, as organisations latch on to the value of internet advertising, and the TV world has not been immune to the downturn with ITV – the biggest commercial broadcasting house in the UK – experiencing a general fall in advertising revenue in the face of the growth of ‘new media’.
    

Advertising budgets being cut

With the world financial situation worsening all the time, it has become clear that days of wanton expenditure on advertising are in the past as companies look to streamline expenditure and advertise in amore economical manner.

With the captive audience that internet advertising promises, and a relatively cost effective pricing schedule, more are looking to the newer method as opposed to the traditional TV, magazine or newspaper advertisement.

As in other markets, the growth of spending from the emerging economies in Asia, the Latin American regions and Eastern Europe is expected to continue, but these markets spend a small proportion of that spent by the major world markets.
    

Growth down on estimates

Carat estimates advertising growth in the UK, for example, will grow by only 2.4 percent this year – the original forecast was for 4.3 percent – and 2.2 percent in 2009, while global spend on advertising is estimated at a growth of 4.9 percent as opposed to an estimate of 6 percent.

The growth in popularity of online advertising is projected to give it a market share of 8.6 percent in the global market this year, a figure that overtakes that of radio at 7.4 percent. Increase in advertising spending is expected to grow by a small amount in all areas bar that of newspapers.