Net TV advertising to grow in 2008 despite recession fears
Global net TV advertising revenues will reach US$123 billion in 2008, up 5.8% on 2007, according to a new report from Informa Telecoms & Media. This growth comes despite widespread fears of a global economic recession.
The report, Global Net TV Advertising Forecasts, states that this is an improvement, partly based on the positive impact of the Olympics, from the 3.5% global rise in 2007.
From this 2008 total, net pay TV advertising will bring in US$18 billion, a figure which has doubled over the last five years. Pay TV will represent 15% of total TV advertising in 2008.
Global net TV advertising forecasts
US$ million 2007 2008 2009 2012
Asia Pacific 25,857 27,705 28,811 33,134
Europe East/Middle East 6,203 7,037 7,829 10,321
Europe West 31,001 32,153 33,117 38,923
Latin America 8,918 9,597 10,246 12,574
North America 44,087 46,267 47,008 53,139
Global Total 116,066 122,760 127,011 148,092
Source: Informa Telecoms & Media
By 2012, Informa Telecoms & Media forecasts that global net TV advertising will equate to US$148 billion, up 21% on the 2008 figure.
However, Simon Murray, author of the report, said: “Net pay TV advertising will grow at a much faster rate – up 39% over the same period – to reach US$25 billion by 2012, or 17% of total TV advertising.”
Murray stresses that: “These figures are for net advertising. Informa believes that this is the first time that TV advertising forecasts for this many countries (44 in the report) have been homogenised and reflect only the revenues received by the channels and networks. We have extracted agency commissions, production costs and, most importantly, we have removed discounts. Traditionally, advertising expenditure figures have been reported at rate card prices – i.e. before discounts have been taken out.”
The US still has considerable influence over the global market, bringing in US$43.2 billion in 2007 – or 35% of the world’s total. Japan, the world’s second largest market but home to a sluggish economy, is more or less stagnant, with net TV advertising growing only 12% between 2007 and 2012.
The fastest growing territories are Russia and Romania, which are forecast to double their totals. More rapid growth is expected in India and Indonesia, which will both rise by about 70%.
The global average for net television advertising per TV household is running at more than US$100. The US will be highest at US$380 in 2008 and the lowest China, only US$10, and India, US$11.
Global net TV advertising forecasts per TV household
US$ 2007 2008 2009 2012
Asia Pacific 43 45 46 50
Europe East/Middle East 61 68 75 97
Europe West 188 193 197 225
Latin America 98 103 109 127
North America 352 366 368 404
Global Total 107 112 114 126
Source: Informa Telecoms & Media
North America’s influence over pay TV advertising is even greater than for the total TV market. It took 62% of the total in 2007. However, this proportion will decline to – a still high – 53% by 2012 as other regions gain market share. Eastern Europe & the Middle East will be the fastest growth region, increasing 159% between 2007 and 2012.
The UK is the second largest pay TV advertising market, contributing US$2,234 million in 2007. The UK is atypical – there is only one ad-supported channel taking an audience share of more than 10%, though non-ad-supported BBC1 also passes this level. This provides for a healthy pay TV advertising sector as ITV is the dominant TV ad vehicle, Channel Four and Five are minority interest FTA ad-supported channels (each with an audience share of 4-7%) and no other ad-supported channel achieves an audience share above 2%, spreading ad revenues among many channels.
Global net pay TV advertising forecasts
US$ million 2007 2008 2009 2012
Asia Pacific 1,587 1,932 2,263 3,482
Europe East/Middle East 331 425 527 857
Europe West 3,926 4,374 4,788 6,485
Latin America 460 558 653 986
North America 10,099 10,714 11,160 13,156
Global Total 16,402 18,004 19,389 24,966
Source: Informa Telecoms & Media
Murray concludes: “It is sometimes easy to forget just how large a market total TV advertising is. Pay TV, albeit a new sector in many countries, only accounts for 15% of the total. It is only expected to grow to 17% of the 2012 total, even though pay TV advertising will increase by US$7 billion.”
The UK will boast the highest proportion of pay TV advertising as a proportion of total TV advertising, at about a third in 2008.
Korea and Canada will follow at 30%. Korean pay TV advertising will grow quickly, given the weak FTA sector, to half the total by 2012. The proportions in China (heavy government control) and Japan (competitive FTA environment) will be low.
Global Net TV Advertising Forecasts is published by Informa Telecoms & Media, which produces several media business publications, including Television Business International, New Media Markets, Converging Media and TV International.
About Informa Telecoms & Media
Informa Telecoms & Media is the leading provider of business intelligence and strategic marketing solutions to global telecoms and media markets. Driven by constant first-hand contact with the industry our 90 analysts and researchers produce a range of intelligence services including news and analytical products, in-depth market reports and datasets focused on technology, strategy and content.
