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Boost to the TV industry as ad revenues return to growth in 2010

The TV industry will receive a major boost this year with healthy growth in advertising revenues forecast. Broadcasters reined in programming budgets last year as ad revenues fell away sharply, but influential media agency ZenithOptimedia has upgraded its forecasts for ad revenue growth in 2010 and added that TV, along with the Internet, will continue to increase their share of the overall advertising market.

Globally, Zenith is forecasting a 2.2% increase in advertising this year. The hard hit developed TV markets in the west are now stabilising and Zenith forecasts steady overall growth over the next three years.

“Ad expenditure is accelerating in bullish developing markets, while in the developed world the downturn is coming to an end more quickly than expected,” Zenith analysts said.

In Europe, Zenith highlighted the UK as a market showing signs of ‘surprising strength’ with growth of 16% expected in the second quarter. Spain, meanwhile, has absorbed a 20% reduction in ad capacity as advertising was removed from public channels without reduced overall expenditure.

In terms of share of the overall advertising market, TV and the Internet were the only mediums that increased share. Spurred by growth in developing markets, TV took 39.4% of all ad revenues last year and this will rise to 40.3% this year and 40.6% in 2011.

Internet, meanwhile, accounted for 12.6% of all ad spend last year and that will rise to 13.9% this year and 15.4% in 2011. TV’s “brand-building power is a great complement to the Internet’s strength in generating response and sales,” Zenith noted.