Global Media Intelligence Report

Companies worldwide will spend nearly half a trillion dollars on advertising this year. But spending that money wisely is more of a challenge now than ever before because of the changes brought about by the growing importance of digital media. To meet that challenge, marketers need dependable data about evolving economic conditions, consumer spending patterns, media consumption habits and competitor spending levels.

And multinational corporations and their agencies need to compare and contrast these trends across regions and countries. Finally, there is the inexorable global shift to digital, where both consumers and marketers are spending more time and money. Yet for all but the most developed markets, there is a lack of objective, credible information available to help marketers strategize and execute their digital marketing plans. Which is precisely why we created this report. In true collaboration, eMarketer produced this Global Media Intelligence report with the help of Starcom MediaVest Group (SMG).

The report covers media usage developments, advertising spending and marketing trends for six regions worldwide, as well as detailed information for 29 countries. Under the leadership of Kate Sirkin, EVP of Global Research, the SMG team helped identify and gather the most compelling data from leading research sources in both local and core global markets. eMarketer then crunched the numbers, evaluating and analyzing data from multiple research sources, including SMG and other respected firms that have longstanding presence and deep knowledge of their respective geographic markets.

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We believe this intelligent “aggregation and analysis” approach yields a far more accurate and objective picture of the global marketplace than any single research source could provide. We are sincerely grateful to the research firms who generously agreed to have their data featured in this report, the names of whom are too numerous to be listed here, but can be seen in the many citations in the pages that follow.

Executive Summary

Take a global advertising/media industry that has been going through seismic changes (most notably, the inexorable shift toward digital channels), add a worldwide recession, and you have a situation that can confuse even the savviest marketers. The purpose of this Global Media Intelligence report is to help you make sense of the often-conflicting data and shed some light on the trends that will have the most impact on your business.

Some of the most obvious—and the most important: I The global recession sped up the shift of marketing dollars to digital in large developing markets such as China, India and Brazil. I Mobile phone usage has become the dominant form of communication in emerging markets, in some cases even overtaking TV. I In developed regions, marketers can engage the consumer at multiple access points (e. g. , TV, online, mobile, out-of-home) virtually simultaneously, providing opportunities for cross-channel and integrated campaigns. But the data also gives a glimpse into early-stage developments that should give marketers food for thought.

For example: I Is the aging of the large UK internet audience an early indicator of a trend that could lead to greater penetration throughout Western Europe? I Given the disparate internet adoption rates throughout Central and Eastern Europe, will mobile be more attractive to marketers in the region? I The recession accelerated the shift of budgets to the Asia-Pacific region; will that pace of change continue? I What accounts for the relatively strong media markets in Latin America compared with the rest of the world? I How can marketers make the most of opportunities in the Middle East and Africa, which, while still relatively mall, show the fastest growth rates in the world? I Is the increase in at-home media usage in North America a temporary shift spurred by the recession, or does it signal a permanent change in media consumption habits in the world’s leading online market? In the following pages, you will find detailed data that should prove invaluable in helping you decide which media to use, which consumers to target with which digital platforms, and which regions and individual markets offer the best potential return on every marketing dollar in 2011 and beyond.

Asia-Pacific

With the exception of Australia and Japan, AsiaPacific weathered the global economic recession from 2008 to 2009 better than the rest of the largest regional markets in the world. This was due primarily to the rising consumer classes of China and India, whose full potential remains to be tapped. Many in marketing and advertising believe that Asia-Pacific and other developing regions represent the greatest opportunities for industry growth.

Most agree that the global recession accelerated this shift. eMarketer’s own data on advertising spending supports this theory. Asia-Pacific is in second place behind North America in total media ad spending and will continue to pull away from Western Europe as the market matures, reaching $173. 2 billion in 2014. Asia-Paci? c Total Media Advertising Spending Metrics, 2009-2014 billions, % of total and % change 2009 Worldwide Asia-Paci? c —% of worldwide —% change $465. 1 27. 6% -5. 0% 2010 $482. 6 28. 0% 5. 3% 2011 $495. 0 28. 5% 4. 4% 2012 $523. 4 29. 2% 8. 3% 2013 $543. 30. 0% 6. 6% 2014 $564. 0 30. 7% 6. 3% eMarketer excludes mobile advertising from online spending estimates. Based on the high penetration of mobile devices in Asia-Pacific, mobile spending should also contribute to overall increases in spending on digital media. Asia-Paci? c Online Advertising Spending Metrics, 2009-2014 billions, % of total and % change 2009 Worldwide Asia-Paci? c —% of worldwide —% change $55. 2 $11. 0 19. 9% 5. 7% 2010 $61. 8 $12. 6 20. 4% 14. 7% 2011 $68. 7 $14. 6 21. 2% 15. 5% 2012 $79. 0 $17. 4 22. 0% 19. 4% 2013 $87. 4 $19. 6 22. 4% 12. 6% 2014 $96. $22. 2 22. 9% 13. 3% Note: includes banner ads, search, rich media, video, classi? ed, sponsorships, lead generation and email; excludes mobile ad spending Source: eMarketer, June 2010 118084 118084 www. eMarketer. com South Korea and Japan consist of experienced media users—the youngest generations have been exposed to the internet, broadband and mobile digital technologies for their entire lives, while older generations have worked with most of the technology still in use today. The result is penetration rates of 90% or higher for both traditional and digital media.

China and India are at the other end of the spectrum, as the younger generation begins to enter a middle class with high expectations for advancement and access to all media. This demographic includes young and newly urbanized consumers who make up the fastest-growing population of internet users in the world, pegged by eMarketer at 581. 6 million in 2010. Australia falls in the middle with a more diverse, Westernized economy. However, government investment in broadband technology over the next six years could vault Australia into a eading position for internet use and media consumption worldwide. Along with South Korea and Japan, Australia already has a well-developed online ad market, accounting for around 20% of total media spending. $128. 4 $135. 1 $141. 1 $152. 8 $162. 9 $173. 2 Note: includes direct mail, internet (excluding mobile), magazines, newspapers, outdoor, radio, TV (broadcast and cable), yellow pages and other Source: eMarketer, June 2010 118083 www. eMarketer. com 118083 The region will increase its share of worldwide ad spending from 28% in 2010 to 30. 7% in 2014.

Higher growth rates will allow AsiaPacific to close in on North America and eventually surpass it sometime beyond the current forecast period. Online advertising will show double-digit growth from 2010 to 2014, but from a smaller base. By 2014, online ad spending in the region will hit $22. 2 billion, 22. 9% of the worldwide total. Online will increase as a portion of total spending in Asia-Pacific from 8. 6% in 2009 to 12. 8% in 2014, lagging behind the share of dollars that will go online in North America and Western Europe.

AP-1 Australia

As in most developed countries, total media spending dropped in Australia during the recession, with researchers estimating declines of 5% (Carat Insight, March 2010) to 8. 4% (ZenithOptimedia, April 2010; MAGNA, May 2010) in 2009. This year has brought a return to growth, with all researchers predicting moderate increases in spending through 2012. Spending forecasts this year converge around $10 billion. The online picture is rosier, with 2009 growth estimates of at least 9%. Double-digit increases are expected through 2012, when both MAGNA and ZenithOptimedia predict online ad spending ill reach $2. 1 billion in the country. The importance of online advertising in Australia reflects its advanced internet user population. eMarketer estimates that more than two-thirds of people in Australia accessed the internet at least once a month in 2009. In 2010, internet users reached a total of 14. 8 million and are forecast to hit 16 million in 2014. Data from Roy Morgan Single Source Australia indicated that while TV maintained its status as the most widespread medium with 92. 6% penetration, mobile phones surged to become the secondmost-widespread device, at 85. % in 2009. Internet usage nearly doubled as users spent 7 more hours online per week in 2009 than in 2005. Web users in Australia are among regional leaders in social media usage as well. Population in Australia, 2000-2010 millions 21. 3 21. 5 20. 5 20. 7 21. 0 19. 8 20. 0 20. 2 19. 1 19. 3 19. 5 Media Penetration in Australia, 2000, 2005 & 2009 % of adult population 2000 TV viewers* Mobile phone owners Magazine readers Internet users (home) Newspaper readers** Radio listeners* Pay-TV subscribers 93. 4% 51. 0% 88. 1% 39. 6% 85. 0% 68. 9% 21. 3% 2005 92. 5% 78. 4% 85. 9% 64. % 83. 8% 65. 2% 25. 1% 2009 92. 6% 85. 2% 80. 7% 75. 6% 75. 6% 61. 7% 25. 9%

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