ZenithOptimedia is projecting steady year-over-year advertising growth in Canada for the next four years. The Internet is expected to experience the biggest jumps with double-digit growth between 20% and 14.2% each year from 2005 to 2008. Single-digit increases are in the cards for newspapers, magazines, TV, radio, cinema, and OOH/transport.
Ad expenditure at current prices (C$ million)
| 2004 | 2005 | 2006 | 2007 | 2008 | |
| Newspapers (total) | 3,437 | 3,499 | 3,562 | 3,623 | 3,684 |
| Magazines (total) | 647 | 663 | 682 | 702 | 727 |
| TV (total) | 2,788 | 2,886 | 2,985 | 3,081 | 3,179 |
| Radio | 1,246 | 1,296 | 1,348 | 1,408 | 1,479 |
| Cinema | 16 | 17 | 18 | 19 | 21 |
| Outdoor/Transport | 303 | 323 | 343 | 367 | 393 |
| Internet | 364 | 500 | 600 | 700 | 800 |
Ruth Klostermann, director of strategic resources for ZenithOptimedia in Toronto, says consumers have been more bullish than advertisers this year. Media spending has slowed during the year, led by automotive, food, and financial. On the consumer side, she says that even with interest rates inching up and increased energy costs, there are as yet no signs of consumer belt tightening. Promises of tax relief from politicians on the campaign trail could also bolster spending through to the end of this year.
She says that while TV is flat year to date, the stability in the new fall season schedules should reassure advertisers moving into the spring. Conventional broadcasters are also responding to buyer demands for content integration; something the cable stations have used very effectively to grow their share of TV ad dollars.
In addition to softening ad sales, magazine publishers are also facing postal rate increases in 2006 and a reduction in government funding from the Publishers Assistance Program which pays up to 70% of a publication’s mailing costs. The largest magazines will be hit hardest, incurring hundreds of thousands of dollars in additional mailing costs. Some are already trimming subscriptions to reduce the impact and we can expect to see a greater focus on more profitable newsstand sales to maintain circulations. Publishers will also be refining their Internet product to further develop that source of revenue. Despite these immediate challenges, magazines are expected to hold their share of total ad spend over the next three years.
While 2005 ad revenue growth has slowed considerably, media sellers will benefit from a Christmas bonus of election spending as Canadians head to the polls once again in January.
