Media spend in the year ahead

Following the release of several spend forecasts, media agency executives Warring, Fulford and McMorran share their thoughts on what 2011 might look like, ad-spend wise.

Can everyone breathe a little easier now?

Although not exactly overflowing with glee, two global ad-spend forecasts this week indicated there’s definitely a warmer hue in today’s media market when compared with 2009′s dismal close of the same time last year.

Group M predicted that globally, worldwide ad spending will exceed $500 billion in 2011, a 5.8% increase over 2010. The global parent co also noted that all ad dollars lost in 2009 have been recovered, and spotlighted Canada as one of the markets leading the growth charge in 2011 ad spend, with a projected contribution of over $1 billion.

ZenithOptimedia also released a global report – along with Canadian data from Zenith’s Toronto office – forecasting 4.6% growth globally for 2011 and 5.2% growth in 2012 and 2013. Both reports noted that the global economy is still fragile (with uncertainty in the Eurozone and continued trouble in the US) but that built-up corporate cash reserves are set to serve companies well going forward.

MiC reached out to a handful of Canadian media executives to get their thoughts on the year ahead, and found the overall mood seemed to be one of cautious optimism.

‘We’re definitely going to see some recovery and increase in spending in certain categories hit hard through the recession like automotive,’ Annette Warring, CEO, Vizeum Canada, tells MiC.

‘However, I would caution marketers and agencies not to simply revert to their old ways of excessive spending. If there was one positive thing that came from the recession it’s that it forced us as an industry to be more responsible with our clients’ marketing investments. In a sense, we had to catch up to the way consumers were behaving and find new, more effective and cost efficient means to communicate with them. We believe that in this context, being a genuine business partner as a media agency means more than just ensuring you get in front of as many people, of the right target audience, as often as possible. It means taking responsibility for consumer insight, both originating it and applying it.’

Joanne Fulford, media director at Blammo Worldwide (formerly GJP), says although she feels positive about 2011, she’s worried clients will keep one hand on their wallets until consumer spending proves it will stick around.

‘My fear is that clients may be cautious to release ‘full’ budgets until later in the year, which makes it difficult to plan ahead,’ she explains. ‘I think there will be a heavier backend to 2011, as clients release more of their marketing surplus mid-year once they feel more comfortable. I feel that spend patterns will continue to shift more into the online space and agencies/clients are also likely to start reporting more on budgets that they invest into resources for things like social media as ad spend instead of fees. So, we will hear less about the zero-cost of social media and more about the cost behind the thinking, strategy, idea generation, tracking and day-to-day maintenance of social media campaigns. Hopefully we’ll see a surge in mobile media as well but I am not sure yet if I believe that will be the case.’

Longtime Starcom executive – and occasional MiC contributing blogger – Valerie McMorran says the mood at SMG is one that’s largely ‘positive and robust.’ TV will continue to be king, she says, but will grow in lockstep with online, which will also continue to expand its marketshare (at the expense of print).

‘We’re very much thinking along the lines that 2011 will be a good year but not necessarily bullish,’ she says. ‘I think there’s anticipation that the US is still recovering and that has ramifications for us, as all the global markets are not in as good shape as Canada. What we’re seeing here in this marketplace is that ad dollars are, if not flat, seeing only some increases. We haven’t seen any sort of decline, and across category, we don’t have automotive (yet!), but whether it’s CPG or financial institutions or gaming, it’s pretty steady. The holiday season is going to be very telling. I think consumers are exhibiting cautious optimism; there isn’t any true angst. That’s been our read on the market from a number of sources and that continues to be our stance. The negotiations will play out accordingly!’

Related stories: Media spending to rebound slightly in 2010: report