Contrary to its December prediction that advertising growth this year in the largest markets in the world – North America and Western Europe – would grow by 4.1%, ZenithOptimedia is now forecasting an upward spike of only 3.7%.

Released yesterday, ZO’s analysis attributes the pessimistic revision to current economic uncertainty due particularly to the mounting credit crunch sparked by the sub-prime mortgage crisis in the United States.

Elsewhere in the world, however, the agency’s report strikes a more positive note, predicting ad growth of 11.1%, rather than its earlier estimate of 10.9%.

ZO continues to be bullish about the viability of online properties. ‘Once again, we have substantially increased our forecasts for Internet advertising, as it has continued to exceed our expectations,’ states the new report. It estimates that the Internet will account for almost 10% of the global advertising marketplace in 2008 – to some degree at the expense of some traditional media, especially newspapers’ print editions.

In this context, the report states that: ‘Online video and local search are now generating substantial new revenues. In the slightly longer term, we expect behavioural targeting on social networking sites to provide fruitful new opportunities to advertisers.’