Advertising Spending Continues Gradual Rebound

New Worldwatch Institute study examines how growth in Internet media has led to increasing global expenditures on advertising

Washington, D.C.Global expenditures on advertising grew 3.3 percent in 2012 to $497.3 billion, a gradual rebound since the sudden 9.6 percent drop in 2009 as a result of the global economic downturn. Spending has responded to shifts in popular media with Internet advertising the fastest-growing sector in 2012, now accounting for 18 percent of the total, according to Worldwatch Institute’s Vital Signs Online service (www.worldwatch.org).

U.S. advertising expenditures grew by 4.3 percent in 2012 and are still nearly a third of the global total. The Asia Pacific region accounted for the fastest growth, however, with ad spending there increasing by 7.9 percent in 2012 (excluding Japan, which grew by 3.1 percent). Expenditures fell by 2.2 percent in Western Europe, the only region to see a decline, largely due to the ongoing Eurozone crisis.

The growth in spending on Internet ads has been driven by the expansion of social media and online video advertising. Mobile and social media now account for more than half of all advertising revenue in the United States, for example, having increased by more than 30 percent in both 2011 and 2012.

“As consumers grow overexposed to advertising, traditional forms such as television commercials, print advertising, and billboards are becoming less effective,” said Shakuntala Makhijani, the study’s author. “As a result, advertisers are turning to more subtle techniques, such as promotional material on blogs, product placement, and interactive advertising on social media such as Facebook and Twitter. The distinction between advertising and media content is therefore increasingly blurred.”

The impacts of advertising and consumerism on all aspects of society and culture are well documented. Advertising targeted at children is particularly penetrating and influential, defining their identity as consumers from an early age and interfering with normal childhood development. Evidence has shown that children are experiencing increased physical, emotional, and social harm as a result of consumerism through advertising.

U.S. consumer advocates continue to call for limits on the extent and influence of advertising, especially in environments such as health clinics and public spaces as well as advertising specifically targeted at children. In particular, advertising in public schools has gained force in recent years and has infiltrated nearly all aspects of student life.

Advertisers have also focused more resources recently on “green” advertising aimed at attracting consumers with claims of improved environmental impact by tapping into growing public interest in sustainability and the environment. The number of new products marketed with environmental claims each year in the United States grew from around 100 in 2004 to over 1,500 in 2009.

Due to increasing false claims by advertisers about product sustainability, the U.S. Federal Trade Commission established updated Green Guides in 2012 that will allow the agency to take enforcement action against deceptive environmental marketing. The guidelines discourage the use of general and unsubstantiated terms such as “eco-friendly” and include strong guidelines for use of terms such as “biodegradable” and “recyclable.”

While regulatory controls on false advertising such as the Green Guides are a positive development, true sustainability will ultimately require less material consumption and therefore stronger overall limits on advertising to stem its global growth and increasing presence in everyday life.

Further highlights from the report:

  • Newspaper advertising has declined significantly, dropping from nearly a third of all expenditures in 2002 to less than a fifth in 2012.
  • The expansion of television’s share of global advertising has leveled off after decades of growth: it rose from 36 percent to 40 percent of advertising expenditures between 2000 and 2012.
  • Global product placement expenditures are increasing rapidly, reaching $8.2 billion in 2012, with the United States accounting for more than half of the market worldwide.
  • Retail companies account for nearly one fifth of total advertising spending, followed closely by the automobile industry in the United States.
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Notes to Editors:

For more information and to obtain a complimentary copy of “Advertising Spending Continues Gradual Rebound Driven by Growth in Internet Media,” please contact Supriya Kumar at skumar@worldwatch.org.  

About the Worldwatch Institute:

Worldwatch is an independent research organization based in Washington, D.C. that works on energy, resource, and environmental issues. The Institute's State of the World report is published annually in more than 15 languages. For more information, visit www.worldwatch.org.

About Vital Signs Online:

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