Ad markets to outperform economy in 2012: report (Reuters)

LONDON (Reuters) ? The global advertising market is forecast to grow at a faster rate than the world economy in 2012, due to key factors such as the U.S. Presidential election and the London Olympics, although expectations have slipped in recent months.

According to a new forecast by media service agency ZenithOptimedia, the global advertising market will grow by 3.5 percent in 2011 and by 4.7 percent in 2012, down from a forecast in October of 3.6 percent growth in 2011 and 5.3 percent in 2012.

The reduction stems from the euro zone debt crisis and the impact it is having on business confidence although overall the forecast shows that advertising has held up well during the uncertainty.

Zenith attributes much of the strong spending to the fact that unlike the downturn in 2008, companies have cash available to spend and are prepared to use it to grow market share.

The Japanese market should also rebound as it recovers from the huge earthquake in March, and the European soccer championships next year should also attract marketing spend.

"The global ad market is therefore remarkably strong at a time when the eurozone threatens to fall back into recession and drag down the growth of its trading partners," the group said.

"In general, advertisers have built up large cash reserves and -- thanks to exceptionally loose monetary policy in the developed world -- are earning very little interest on this cash."

According to a Reuters poll in October, economists expect global GDP to grow by 3.8 percent in 2011 and by 3.6 percent in 2012.

Zenith expects Western Europe to grow by just 2 percent in 2012 even though the London Olympics and the soccer championships will lift spending. North America was described as looking 'decidedly healthier' with growth of 3.6 percent forecast for 2012.

It expects developing markets -- which it defines as everywhere outside North America, Western Europe and Japan -- to continue the strong growth, increasing its share of the global ad market from 32.3 percent in 2011 to 35.9 percent in 2014.

ZenithOptimedia is owned by French advertising group Publicis.

(Reporting by Kate Holton; Editing by David Cowell)

Source: http://us.rd.yahoo.com/dailynews/rss/enindustry/*http%3A//news.yahoo.com/s/nm/20111205/media_nm/us_advertising_forecasts

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