Global ad spending is slowing down, prompting a prominent market researcher to cut its estimate of growth this year. eMarketer says ad revenues worldwide will rise 5.4% this year, to $519 billion, down from its 6.8% growth estimate seven months ago.
The culprit, not surprisingly: worries about the economy. No doubt the last couple of months of concern over the U.S. going over the fiscal cliff, thereby potentially triggering a recession, has marketers spooked about committing too much when it looks like consumer spending could follow national finances off the cliff.
That 5.4% increase is still a big improvement over 2011′s 3.6% growth, though partly thanks to the Olympics and the election. And eMarketer, whose forecasts are based on analysis of economic conditions and other researchers’ estimates, reckons growth will be fairly steady at about 5% through 2016.
What’s more, online ad spending, not specifically addressed in this report, is expected to grow much faster. In particular, mobile ad spending, while still relatively small, will grow like crazy–nearly tripling this year, to $4 billion in the U.S. thanks to surging “native” ads from Facebook and Twitter.
But slower-than-expected ad spending could have ripple effects on a wide swath of companies depending on a strong advertising market, from Google and Facebook to hundreds of startups.
And it gets even worse for the many companies chiefly dependent on ad spending in North America, the world’s biggest market. Here, eMarketer expects growth of 4.9% this year, dropping precipitously to 3.5% next year and bumping up and down around that rate for several more years.
Propping up growth are surging ad markets in China, India, Indonesia, South America, and even Russia.