Global ad spending outstrips U.S. growth

A visitor walks past a billboard displayed on wall of an alley of the Shanghai Auto Show in Shanghai on April 21. STORY HIGHLIGHTSA rebound in advertising spending outside the US is outstripping growth thereGrowth outside world's largest market driving strong results for media and marketing firmsRELATED TOPICSAdvertising (FT) -- A rebound in advertising spending outside the US is outstripping growth in the world's largest media market, driving strong results for media and marketing companies.

While quarterly earnings statements on Thursday confirm the US market is emerging from its advertising recession, there is stronger growth in international markets.

Viacom reported domestic advertising growth of 11 per cent and Discovery Communications saw 15 per cent advertising growth at US networks. But in overseas markets Viacom saw a 19 per cent jump and Discovery's advertising revenues leapt by a better-than-expected 24 per cent.

WPP, the world's largest marketing services group, said 2010's surprising recovery in mature markets such as the US and Germany had continued, but even faster growth was coming from markets in Asia-Pacific, Latin America, Africa and the Middle East, and in central and eastern Europe.

"They were last into the recession and last out," WPP said.

Interpublic, a US advertising holding company, echoed the upbeat comments.

Michael Roth, chief executive, said Interpublic's growing roster of global agencies had contributed to international organic growth of 10 per cent, which exceeded analysts' expectations.

"We're excited about what's happening in Latin America, China and India," Mr Roth said.

Interpublic's 18 per cent growth in Asia was led by India and China, while Latin America saw organic growth of 13.6 per cent, "reflecting both the strength of the economy and our offerings in Brazil", he said.

US film and cable television groups also saw strong demand overseas. At Viacom, the group behind MTV hits such as Jersey Shore and Paramount films including Justin Bieber's concert movie, ad sales were particularly strong in the UK and Latin America.

Philippe Dauman, chief executive, predicted Viacom's international operations would continue to grow faster than its domestic businesses, while expanding profit margins.

International revenues and margins at Discovery, the cable TV group behind Deadliest Catch and Man vs Wild, beat analysts' forecasts.

David Zaslav, chief executive, said Discovery was benefiting from the continued penetration of cable and satellite TV around the world, with growth led by Latin America and central and eastern Europe.

Advertising's recovery has helped TV in particular, over print media and radio.

Thursday's figures confirmed the strength of cable networks such as Viacom's VH1 and Discovery's TLC.

© The Financial Times Limited 2011

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