Growth in global ad spending

Zia Daniell Wigder | March 18, 2008, 11:01 AM

Carat issued a release yesterday with their projections for total advertising growth around the globe. Though many growth rates have been revised down slightly from previous forecasts, they remain bullish on online advertising growth, particularly in several developing markets. They project that the online advertising markets in China and Russia, for example, will grow by 56% and 46% respectively in 2008. Jupiter forecasts the US online ad market to grow by just 15% during that same time period.

A look a global growth rates might suggest that developing markets are poised to overtake today's major online markets, just as China made headlines recently by announcing they were about to surpass the US in total Internet users. As with online retail spending, however, online advertising spending in China is growing rapidly but still remains small as compared to markets in the US and Europe.

Projections of China’s online advertising market in 2008 can range by $1 billion, usually falling between $800 million and $1.8 billion. Even the higher estimate puts China’s online market at just 12% of the European one and 8% of the market in the US (the lower estimates halve those figures). Russia’s online advertising market remains smaller still, comprising just 1-2% of the European or American market.

Obviously high growth rates for these online markets means they will become significant global forces, and ones that should be on many companies’ radar screens longer term. For now, however, the relative size of the markets should be taken into consideration alongside growth rates.

We’ll be looking at some of these issues in an upcoming report on Prioritizing Market Entry. The report will help companies come up with a short- and long-term priority list based on the unique factors in major online markets around the globe.