Forecast Wrap-up: WPP Is Bullish On Display; eMarketer Revises Upward

The major ad holding companies released their respective spending forecasts today, so here’s a wrap-up: WPP is expecting display to rise 13.1 percent next year in the U.S. while globally, online should surpass newspapers in ad spending by 2012, a year earlier than Magna Global predicted in its latest forecast. Meanwhile, eMarketer raised its estimates on U.S. online ad spending. It now expects online to gain 13.9 percent as 2010 draws to a close, with 10.5 percent next year.

Earlier, Magna Global said online should rise 11.6 percent in the U.S., while Zenith expects global internet ad revenues to grow 14.1 percent next year.

While newspapers have been steadily losing ground the past few years, as the web significantly eroded the classified advertising newspapers were so heavily dependent on, the idea of the web supplanting it as the number two ad category after TV surely means something emotionally to the media industry and highlights the changes that have happened so rapidly.

Globally, WPP said online ads will contribute 37 percent of global ad growth in 2011 and is likely to reach $82 billion, a growth rate that suggests it will overtake newspaper spending (forecast at $90 billion in 2011) at some point in 2012.

As WPP’s GroupM Futures Director Adam Smith put it, in a sense, spending on internet advertising may have already passed newspapers by, “if one allows that measured internet ad investment does not include substantial advertiser investment in content creation, search-engine optimization and analysis.”

The growth of display advertising has experienced a major comeback this past year. Much of the thanks to that has to do with the continuing interest in online video by viewers and advertisers. In part, the recovery in online advertising is actually related to the weak economy as well. As total ad spend has improved somewhat — eMarketer predicts a 3 percent rise this year and a 1.2 percent gain in 2011, while GroupM sees the trends differently, calling for a 1.2 percent raise in 2010 and a 3.7 bump next year — marketers still appreciate online as a cheaper, more measurable alternative to traditional media, noted eMarketer principle analyst David Hallerman.