Global advertising to expand this year helped by World Cup

PARIS, June 16 Sun Jun 15, 2014 7:01pm EDT

PARIS, June 16 (Reuters) - The global advertising market is set to grow 5.4 percent this year to reach $524 billion helped by a boost in television ads during the soccer World Cup, according to media buyer Zenith Optimedia.

The Publicis-owned forecasting unit shaved 0.1 percent off an earlier prediction for the year after political tumult in Ukraine damaged the local economy.

The world's largest advertising groups such as Martin Sorrell's WPP, second-place Omnicom and third-placed Publicis often post growth rates correlated with global gross domestic product. They are set to benefit this year as the United States - the largest ad market followed by Japan and China - is expected to grow steadily.

Zenith said the total amount of media spend will reach up to $524 billion at year end, driven by an improved global economic outlook and the rapid rise of mobile advertising.

"Growth will continue to improve over the next two years, reaching 5.7 percent in 2015 and 6.1 percent in 2016, driven by continued economic recovery, including, at last, the Eurozone," said Zenith Optimedia in a statement.

Despite an uptick during the World Cup in June and July, the forecasters also said that television's share of global advertising spending would peak this year after rising steadily for decades from 29.9 percent in 1980 to 39.6 percent in 2013.

Behind the shift lies the rapid growth of Internet advertising, which is growing 16 percent a year compared to 4 percent for television. Major companies from auto makers to consumer products now see on-line ads as being suitable for brand building much as television once was.

Television's share of ad spend will erode to 39.4 percent this year and 38.3 percent by 2016, according to Zenith.

Publicis shares are down 5.1 percent this year, while WPP's and Omnicom's are both down 5.6 percent.

(Reporting by Leila Abboud; Editing by Stephen Powell)