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MAY 2008 SHAPING THE FUTURE OF THE NEWSPAPERNewspapers, although still growing ad revenuesfrom $102.5 billion in 2002 to $132.7 billion in2011, continue to lose market share. Othertraditional media such as magazines and radio arealso experiencing share decline, from 14 percent and9 percent, to 12 percent and 7 percent, respectively.The most growth is happening in the Internetsector, which is predicted to surge from $9billion in 2002 to $73.1 billion in 2011. ItsCAGR from 2007 to 2011 will be three timesmore than the average, PwC has forecast, withits share jumping from less than three percentin 2002 to nearly 14 percent in 2011, and isexpected to continue rising.However, according to figures from IBM,global advertising spending will increase fromless than US$300 billion in 2002 to more than$450 billion in 2010, with a steady annualgrowth rate of over 5.7 percent. After 2006, thetotal growth rate has been increasing by anaverage of about 5.9 percent per year, due tothe acceleration of digital media.In terms of compound annual growth rates,new media formats, including mobile andonline, outperform more traditional media,such as press and radio. New ad formats have amuch higher CAGR from 2006 to 2010, with22.4 percent, compared with the 4.4 percentfor traditional formats.Mobile advertising is on top, with 41 percentCAGR. Other new ad formats, such as theInternet, interactive TV promotions and ingameadvertising, all have nearly 20 percentCAGR. The CAGR of traditional ad formats,on the contrary, lag behind with less than fivepercent, except for U.S. product placement,which has a CAGR of 20 percent. Press media,including magazines and newspapers, arestagnant, with only four percent and twopercent CAGR from 2006 to 2010,respectively.Global advertising by regionGlobal advertising expenditures are forecast toexceed US$482 billion by the end of 2008,nearly double the $243 billion spent in 1995,and are predicted to reach $539.2 billion in2010, according to ZenithOptimedia.Of all the regions, North America accounts forthe biggest part of ad expenditures throughoutthe years, although its share has been slightlydropping, from 46 percent in 2000, and isexpected to continue to drop to about 38percent in 2010. Spending, however, will growfrom $102 billion in 1995 to $207.458 in 2010,about two folds growth.Western Europe is the second biggestcontributor to total ad expenditure, but itsshare is expected to drop to 23 percent in2010, from 28 percent in 1995. Spending, likeNorth America, will continue to grow, from$67.7 billion in 1995 to $125.2 in 2010.500,000Advertising Expenditure by Region, 1995-2010US$ million at current pricesNorthAmericaWesternEuropeYOY growth %600,000AsiaLatin40PacificAmericaCentral& Eastern Europe30400,000300,000200,00020100-10100,000-2001995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010-30Source: ZenithOptimedia © World Association Newspapers 2007-200820