GLOBAL NET TV ADVERTISING FORECASTS
Global Net TV Advertising Forecasts Summary
Global net TV advertising revenues are estimated to reach US$123 billion in 2008, up 5.8%
on 2007. This growth comes despite widespread fears of a global economic recession. From
this total, net pay TV advertising will bring in US$18 billion, a figure which has doubled over
the last five years. Pay TV represents 15% of total TV advertising in 2008.
By 2012, Informa Telecoms & Media forecasts that global net TV advertising will equate to
US$148 billion, up 21% on the 2008 figure. However, net pay TV advertising will grow at a
much faster rate – up 39% over the same period – to reach US$25 billion by 2012, or 17% of
total TV advertising.
These figures are for net advertising. Informa believes that this is the first time that TV
advertising forecasts for this many countries have been homogenised and reflect only the
revenues received by the channels and networks.
We have extracted agency commissions, production costs and, most importantly, we have
removed discounts. Traditionally, advertising expenditure figures have been reported at rate
card prices – i.e. before discounts have been taken out.
This can inflate the importance of certain media, especially television which usually offers
higher discounts than other media such as newspapers. Furthermore, pay TV channels
frequently offer higher discounts than established free-to-air terrestrial players in an attempt
to attract advertisers to their non-mass market propositions.
Much has been reported about the fast growth in the online advertising sector. Online is
undoubtedly rapidly advancing, but most of the numbers reported are gross and do not reflect
the actual revenues received by the web sites.
Online advertising poses the greatest threat of any medium to the TV sector. In fact, many
channels and networks are embracing online by offering at least part of their schedules to a
web audience as well as providing other functions such as catch-up programming.
The internet is also providing a diversion for consumers away from TV viewing. Fewer
viewers means that advertisers will want to pay less for their TV ad spots.
Audiences are being further fragmented by greater programming choice. The established
players have reacted to this loss of audience share on their core channels by launching
thematic networks. They are hoping that the collective audiences of these thematic channels
will mean that their total number of viewers will be higher than for the core channel before
fragmentation started.
Many of these thematic channels in Europe are delivered free-to-air on digital terrestrial
television platforms, so they are not strictly pay TV services. However, these channels also
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GLOBAL NET TV ADVERTISING FORECASTS
Forecasts
Global net TV advertising forecasts
2004 2005 2006 2007 2008 2009 2010 2011 2012
Net total TV advertising expenditure (US$ million)
Asia Pacific 24,033 23,836 24,985 25,857 27,705 28,811 30,136 31,583 33,134
Europe East/Middle East 3,690 4,484 5,270 6,203 7,037 7,829 8,638 9,335 10,321
Europe West 28,010 29,083 29,946 31,001 32,153 33,117 35,001 36,361 38,923
Latin America 6,328 7,581 8,472 8,918 9,597 10,246 11,236 11,853 12,574
North America 40,438 40,572 42,986 44,087 46,267 47,008 48,262 49,744 53,139
Global Total 102,498 105,557 111,660 116,066 122,760 127,011 133,273 138,875 148,092
Net total TV advertising expenditure growth (%)
Asia Pacific -0.8 4.8 3.5 7.1 4.0 4.6 4.8 4.9
Europe East/Middle East 21.5 17.5 17.7 13.4 11.3 10.3 8.1 10.6
Europe West 3.8 3.0 3.5 3.7 3.0 5.7 3.9 7.0
Latin America 19.8 11.7 5.3 7.6 6.8 9.7 5.5 6.1
North America 0.3 6.0 2.6 4.9 1.6 2.7 3.1 6.8
Global Total 3.0 5.8 3.9 5.8 3.5 4.9 4.2 6.6
Net total TV advertising expenditure per TV household (US$)
Asia Pacific 43 42 43 43 45 46 47 49 50
Europe East/Middle East 37 45 52 61 68 75 82 88 97
Europe West 176 180 184 188 193 197 206 212 225
Latin America 73 86 94 98 103 109 117 121 127
North America 332 331 347 352 366 368 374 382 404
Global Total 100 101 105 107 112 114 117 120 126
TV households (000)
Asia Pacific 558,608 573,036 585,854 597,966 610,353 623,015 635,952 648,787 661,894
Europe East/Middle East 98,947 100,171 101,215 102,158 103,105 104,060 105,023 105,937 106,857
Europe West 159,324 161,219 163,011 164,638 166,283 167,948 169,672 171,418 173,187
Latin America 86,677 88,213 89,799 91,299 92,827 94,380 95,962 97,572 99,213
North America 121,851 122,572 123,903 125,150 126,410 127,682 128,967 130,265 131,576
Global Total 1,025,407 1,045,211 1,063,783 1,081,211 1,098,979 1,117,086 1,135,577 1,153,980 1,172,727
Pay TV subscribers (000)
Asia Pacific 211,327 234,369 258,977 278,291 296,135 311,338 326,538 342,958 359,883
Europe East/Middle East 25,657 27,552 30,013 33,019 35,804 38,139 40,142 42,040 43,792
Europe West 71,345 74,417 78,106 81,829 85,159 87,843 90,418 92,831 95,026
Latin America 16,487 18,304 20,273 22,950 25,203 27,253 28,905 30,636 32,451
North America 109,089 109,895 111,603 113,864 115,615 116,996 117,884 119,278 120,655
Global Total 433,906 464,537 498,972 529,953 557,917 581,570 603,887 627,743 651,808
Source: Informa Telecoms & Media
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COUNTRY GLOBAL NET TV ADVERTISING FORECASTS
FORECASTS
Australia
US$ million 2004 2005 2006 2007 2008 2009 2010 2011 2012
Exchange Rate ($1 = ….) 1.36 1.37 1.33 1.35 1.35 1.35 1.35 1.35 1.35
Gross all ad spend 12,556 13,364 13,739 14,632 15,802 16,356 17,092 18,117 18,932
Annual Growth (%) 6.4 2.8 6.5 8.0 3.5 4.5 6.0 4.5
Gross total TV ad spend 4,163 4,269 4,094 4,279 4,557 4,671 4,881 5,222 5,484
Annual Growth (%) 2.6 -4.1 4.5 6.5 2.5 4.5 7.0 5.0
% of all ad spend 33.2 31.9 29.8 29.2 28.8 28.6 28.6 28.8 29.0
Net total TV ad spend 2,290 2,348 2,252 2,353 2,506 2,569 2,684 2,872 3,016
Net total TV ad spend/TV Households 314 318 301 310 326 329 340 359 373
TV households (000) 7,292 7,391 7,490 7,591 7,694 7,798 7,899 7,998 8,094
Pay TV subscribers (000) 1,662 1,752 1,931 2,227 2,393 2,540 2,699 2,863 2,995
Annual Growth (%) 5.4 10.2 15.3 7.5 6.1 6.3 6.1 4.6
Pay TV penetration (% of TV households) 23 24 26 29 31 33 34 36 37
Gross pay TV ad spend 164 212 290 342 401 467 537 611 685
Annual Growth (%) 29.1 36.5 18.1 17.2 16.5 15.0 13.8 12.2
% of all ad spend 1.3 1.6 2.1 2.3 2.5 2.9 3.1 3.4 3.6
% of total TV ad spend 3.9 5.0 7.1 8.0 8.8 10.0 11.0 11.7 12.5
Net pay TV ad spend 74 96 130 154 180 210 242 275 308
% of net total TV ad spend 3.2 4.1 5.8 6.5 7.2 8.2 9.0 9.6 10.2
Pay TV advertising per pay TV household 45 55 68 69 75 83 89 96 103
Annual Growth (%) 22.5 23.8 2.4 9.0 9.7 8.2 7.3 7.2
Notes:
Total TV Pay TV
Discounts (%) 20 30
Agency commission (%) 15 15
Production costs (%) 10 10
Channels included in free-to-air: Ten, Seven, Nine, SBS (from Jan. 2007)
Major structural/regulatory changes:
• Elections in late 2007 saw a Labour government voted in for the first time in a decade.
• The outgoing government loosened rules on cross-media ownership and foreign investment in media companies.
• Pay TV penetration is low partly due to the lack of competition, including the absence of IPTV. However, this could change as the government
awarded a next generation broadband network licence for rural areas, with many expecting a similar tender for the major urban areas.
• DTT has enjoyed some success, and is likely to thrive in the next few years as the government distributes more channel licences.
• The existing FTA channels will receive additional digital channel licences.
• No national FTA licence award will take place before 2010 at the earliest.
• The TV ad market suffered in 2006, but has recovered since, with pay TV advertising growing twice as fast as FTA advertising.
• Major sporting events boost advertising - most of them are restricted to FTA channels. The Beijing Olympics should have a positive impact this
year, giving Australia's great track record in winning medals and the relatively small time difference. The Rugby World Cup in New Zealand in
2011 should have a similar impact. Even World Cup soccer performs well despite the time differences in Germany (2006) and South Africa (2010).
• SBS has been allowed to screen in-programme advertising since January 2007.
Source: Informa Telecoms & Media
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