2008 Olympics to boost TV to its highest ever share of world adspend .

ZenithOptimedia predicts the Olympic Games will help lift television’s share of the global ad market to a record 38.2% in 2008, Online video and local search will drive 30% growth in internet ad expenditure this year – nine times faster than the rest of the ad market. Between 2006 and 2009 internet adspend will grow 85% and raise its market share from 6.1% to 9.5%. US downgraded to 2.5% growth in 2007 from 3.3% after credit squeeze and continued slump in housing market.

Television faces many challenges – the spread of PVRs; migration of viewers from premium mass-audience channels to cheaper specialist channels’; and competition from the internet, to name three of the biggest. Despite all these, television will increase its share of global ad expenditure from 37.9% in 2007 to 38.2% in 2008, an all-time record.

Television is, in fact, losing market share in many countries in North America and Western Europe, for the very reasons listed above. In 2008 we expect television’s share of ad expenditure to fall 0.3 percentage points to 32.4% in North America, and 0.5 percentage points to 30.4% in Western Europe. However, the faster growth of ad markets in the rest of the world is counteracting this trend. In these markets television tends to attract a much higher share of ad expenditure, because they are more dependent on FMCG advertisers (who greatly prefer television over other media) and their inhabitants have less media choice. We expect the coverage of the Olympics in Beijing to give an extra boost to television in 2008, particularly in China and its neighbours. We forecast television’s share to grow by 0.5 percentage points to 41.3% in China, by 0.3 points to 42.5% in Asia Pacific, and by 0.3 points to 38.2% across the world. In the absence of this stimulus, its share will fall back to 38.1%, but this is as high as its previous peak, in 2004.

We have revised our forecasts for internet advertising upwards yet again: we now forecast 29.9%% growth this year (up from 28.6% three months ago) and 85% growth between 2006 and 2009 (up from 82%). Online video and local search are the new, fast-growing segments, but display, classified and the rest of search are still growing rapidly as well. We now expect internet advertising to account for 9.5% of all expenditure in 2009, fractionally up from the 9.4% we forecast three months ago.

Newspapers are suffering the most from the depredations of the internet, which is better at delivering timely news and is an efficient substitute for newspaper classifieds. We expect newspapers’ share of world ad expenditure to fall from 29.0% in 2006 to 26.2% in 2009. By contrast, outdoor is in rude health, and is forecast to increase its market share from 5.6% to 5.9% over the same period. New digital displays make it easy for advertisers to book and distribute eye-catching ads at short notice.

The continued slump in the US housing market has led to a sharp drop in property and construction advertising, particularly property classifieds in newspapers. This, and the recent credit squeeze, has led us to downgrade our forecast for growth in the US this year from 3.3% to 2.5%.

Our forecasts for Western Europe, Asia Pacific and Latin America this year are largely unchanged. Central & Eastern Europe and the Middle East – already the stand-out growth regions – have been upgraded again. We now expect Central & Eastern Europe to grow 18.3% this year (up from 16.9% three months ago) and Africa/Middle East/Rest of World to grow 17.2% (up from 15.6%). Eight of the ten fastest-growing markets in the world are in Central & Eastern Europe; the other two are in the Middle East.

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