In our latest report, ECI is providing an update for clients as an aid to their media investment decisions. Our report is compiled with the help of our in house data experience and expert insight. We hope our clients find this ECI report useful as they navigate their way through the turbulent global economy of 2012.

1. MEDIA INTELLIGENCE VALUE
Report Issue No. 5. - January 2012
ECI’s 2012 forecasts – a guide to media investment strategies for 2012
MEDIA INTELLIGENCE VALUE

2. Introduction
In our latest report, ECI is providing an update for clients as an aid to their media
investment decisions. Our report is compiled with the help of our in house data
experience and expert insight. We hope our clients find this ECI report useful as they
navigate their way through the turbulent global economy of 2012.
Without doubt the world’s economies are proceed- In summary, we have structured our reporting ap-
ing at very different speeds by region. It is expected proach to provide the following information:
to continue that way for the foreseeable future and
thus crucially, media investment plans need to be for- • Key markets - Global 15 – revenue growth
mulated with efficiency potential factored in. ranges for 2012
On 24th January the IMF revised its economic • Regional trends summary
growth forecasts. It has done this in response to • Local markets snapshots
continuing worries about the Eurozone crisis.
As we finalise this latest update, the IMF has reduced Our bottom line prediction for 2012 is that, despite
its estimate for global growth in 2012 from 4% to the established markets of the Western world con-
just 3.25%. In the Eurozone a mild recession of 0.5% tinuing to struggle with a likely further dip in eco-
contraction is expected. So outlooks are changing nomic fortunes in Europe, media investment is likely
and advertisers may need to adapt to moving events. to grow overall. And despite the depth of the pre-
sent downturn, which is expected to be as deep as
The main objective of this report: ECI’s Economic any in living memory, advertising media investment
Report Issue 5, is to avoid overburdening our clients globally looks set to grow at around 4% in 2012.
with unnecessary detail. However, as a further
service, ECI is very happy to provide customised As we progress through this report we will see
detailed reports at local market level in all major what factors are encouraging this possibly surprising
markets. growth rate prediction.
Our overall intention and hope is, that as our clients Our primary data and information sources are, as
read through this report they will be provided with always, recruited from the databases and experience
key packets of important information. The report of our ECI office and partner network. To inform our
is thus designed to provide a strong platform for predictions and judgements further we naturally are
further reporting insight. party to other seasoned industry observers.
Since ECI’s last economic outlook published mid-2011.
If we had believed some of the more pessimistic modest media investment, which crucially for adver-
commentators back in 2007/8 we might have pre- tisers will mean media price increases.
dicted the current 2012 Euro inspired economic tur-
moil. But few would have predicted the potential for Many advertisers will find it surprising that in a world
knock-on effects to the rest of the global economy. where economic activity is supposed to be heavily
subdued media revenue/investment can be so buoy-
Yet despite the Eurozone problems, even in Europe ant. Media inflation in 2012 continues!
some markets are set to benefit from increased, if
MEDIA INTELLIGENCE VALUE

3. How can this set of events arise and why?
First of all let’s look at the state of the corporations England; the Euro Football Championships in Poland
that make and drive media investment. We are all / Ukraine and the US election all increase media ac-
aware of companies that are in financial trouble. tivity and potentially audience interest. So 2012 may
Banks, retailers, even established, famous brands such witness a turning point in economic fortune, cer-
as Kodak, but the reality is that the on-going cycle of tainly a year of major media events. Important too is
commercial events continually and naturally leads to the ever changing geographical landscape. The order
success and failure. According to general economic of world market investment importance continues
knowledge, we need to balance these negative per- to shift in favour of the emerging markets.
ceptions and look at the many successful corpora-
tions that have amassed cash over the last few years. ECI typically works for its International clients in the
Against a background of continuing low interest major markets as measured by total media expendi-
rates, business managers are challenged to invest this ture. We have nominated a typical selection of 15
cash wisely. One opportunity is to invest some of global markets and attempted to segment them by
this cash to buy market share. Industry feedback is growth rate. We asked our ECI offices and partners
that media budgets are therefore likely to grow. to analyse the local data and make predictions of the
levels of growth advertisers should budget for in the
Working alongside this investment potential for current year 2012.
2012 is the coincidence of a number of very big
media events. The Olympics, to be held in London,
Here is how we structured the resulting predictions:
Country In/deflation Resulting predictions
India + 18%
Brazil + 13%
China + 12%
Russia + 9%
South Africa +9%
Mexico +4%
USA +4% Growth Markets
Canada +4%
Japan +4%
Australia +4%
UK +2%
France +1%
Germany -2%
Italy -4% No Growth Markets
Spain -5%
Some surprising results? – many advertisers might say. When the IMF in January 2012 is continuing to warn
of a Global Economy “in danger zone” how can media revenues and thus equivalent media pricing be rising
by 4%, maybe up to 6% overall?
The signs are clear. As well as an unprecedented year of ultra-media events there is so much unravelling of
investment pressure that media companies genuinely expect the above scenario to unfold in 2012.
MEDIA INTELLIGENCE VALUE

4. Key Extract
The following is a brief extract of our findings at the start of 2012.
– As always there is no one simple trend.
There seems little doubt that the regions are developing at different speeds:
The strongest growth is to be found in Asia and Latin America. Both regions are expected to grow by double
figure percentage.
At the other end of the momentum scale is a flat Europe. For so long Europe, alongside the US has led mar-
keting investment globally. But year after year strong growth in Asia (China hugely influential of course) and
now Latin America (don’t forget South Africa +9%), mean that Europe (and the US) increasingly will account
for a declining share of global media investment.
Market Snapshots
To add to the ‘Global 15’ analysis above the ECI team has made a selection of other important markets and
offer local insights as follows:
Regionally Europe is clearly the most depressed.
With barely +1% aggregate growth in investment expected there are some smaller states as well as some
larger ones that we expect to be in negative territory:
• Italy struggles and its media revenues may decline by in excess of 5%. The ECI
team suggest approximately 4% decline.
• France now coming to terms with its Credit Agency rating downgrade hovers
around the static point and may even decline.
• For Spain, Greece and Portugal the outlook is worse and serious declines in
investment may eventually be the 2012 outcome.
• More prosperous Northern European markets, such as the Nordic 4 and
to some extent the smaller Northern states may well expect positive
investment trends of anything up to 4/5% growth.
• Sitting right in the middle is Europe’s power house
– Germany, where, despite the most prosperous
economy, we expect it most likely that we will
record declining media revenues.
• Finally we cannot ignore the UK. The biggest media
event of recent times, the 2012 Summer Olympics,
takes place in London. Together with a non-Euro
based economy, we expect the UK to move
more independently. Because of this the UK
may well attract more investment growth
than any of the other major European
economies.
MEDIA INTELLIGENCE VALUE

5. Overall key conclusions
Asia is naturally dominated by China:
• China’s growth at +12% compares with years of double digit growth. Two factors increasingly play into
this trend. One is that China is fast becoming the world’s second largest advertising market. And two,
China’s economy is evermore linked to Global trends. Because of this our prediction of 12% growth may
turn out to be an over estimate of what might be possible in a more integrated world. To balance this
view we are also monitoring China’s vast and increasing local consumer market and advertisers that tap
into local consumers, who are little affected by external economic slowdowns.
• India grows. According to our data and experience we predict that India will continue to catch up.
Because of that we believe that the Indian market will enjoy media investment growth at the top of our
expectations at around 18%.
• There are many smaller Asian markets also expected to grow strongly in 2012. Notable strong growth is
expected in: Malaysia, Philippines and Indonesia.
America and especially Latam looks strong.
• We need to note the relative size of the markets in South America. Having said that, the biggest: Brazil
and Mexico are also predicted to grow very strongly.
• But it is the USA itself that commands much of our attention. Despite the recent dreadful economic
background, media investment is likely to surpass most of its counterparts in Europe with perhaps as
much as 4% revenue growth
Overall key conclusions
Forecasters, including ECI, generally agree on an underlying investment pressure, despite the continuing Euro-
zone doubts for 2012.
ECI’s forecasts have softened to closer to 4% Global ment. Over the next two years ECI, together with
growth for 2012. This is down from close to 5% most major industry commentators, continues to
when we made our predictions mid-2011. Naturally believe that Online will become the number two
advertisers will always pay great attention to their investment medium after Television. In fact by the
media costs, which often rank very near to the top middle of this decade it would be surprising if Online
of their company’s cost base. Despite this, even with and indeed Social media’s share has not grown
ECI’s general expectation of cost increases, there is a beyond 20% of the total media investment pot.
deeper, more optimistic story to tell for smaller ad- Forward thinking advertising investors will bear this
vertisers searching out narrower audiences, but also growth in mind when formulating their monitoring
a need for fresh tactics to be adopted by traditional and measurement of investment plans.
advertisers seeking out mass audiences among the
clutter of increased commercial messages. Our final word on client investment plans: only in
Europe do we expect some markets to decline in
When we reported to our clients, mid-2011 we investment. This decline may amplify investment re-
mentioned the significant growth of Online invest- focus.
MEDIA INTELLIGENCE VALUE

6. ECI´s full report findings at selected market level
contain further essential detail. These market
reports are available upon request.
Please call or email one of our consultants. We would be delighted
to discuss further with you.
Fredrik Kinge Joakim Attack
CEO Global Head of New Business
+46 (0)704 24 03 70 +46 (0)705 46 68 06
fredrik.kinge@etatcontrol.com joakim.attack@etatcontrol.com
John Ferguson Ron de Pear
Head of International Global Development Director
+44 (0)79 703 79 011 +44 (0)77 853 46 776
john.ferguson@etatcontrol.com ron.depear@etatcontrol.com
MEDIA INTELLIGENCE VALUE