The World: How the media landscape will evolve in 2007.(future of internet advertising and its effect on other media advertiser's growth)(Industry overview)

China's continued ascendancy, consolidated online growth and a rearguard TV action are all on the horizon.

What business prospects does 2007 hold for the world's marketing communications industry?

The bad news is that there will be no bonanza fuelled by the relentless march of online. The good news is that the bottom is not about to drop out of the market.

According to Group M, WPP's media planning and buying arm, the business can expect a slightly reduced total global media investment this year. Nevertheless, its research not only throws up interesting shifts in global advertising's centre of gravity during the coming year (not least the fact that China is now contributing more to global media growth than the US for the first time), but also a surprisingly robust rearguard action by TV in the face of the internet onslaught.

Last year, the world invested around dollars 395 billion in media advertising. For 2007, that investment is expected to show a slight drop, from 6 per cent to 5 per cent. Although this figure is slightly behind global gross domestic product, the report warns against undue pessimism. 'This does not signify imminent global recession,' it says. 'Demand for marketing services - which is 80 per cent based in mature markets - is as strong as ever.'

Group M's forecasts are made against the background of a global economy currently growing at about 5.5 per cent in cash terms. However, it suggests a key factor is what happens to commodity prices, which were at the root of last year's inflation problems. 'If the world's workshops are paying too much for input, they'll soon get into trouble and the market will correct itself,' Adam Smith, its futures director, says. 'We will have a more serious problem if inflation stifles Western demand for advertising and everything else before it occurs.' Of more immediate concern, however, is what happens in the US, particularly if house prices decline, undermining consumer confidence.

This is reflected in Group M's predictions about the sources of future media advertising growth, which suggest that the emphasis is switching from the Americas to Europe. The dollar's depreciation against most other currencies is cited as a major reason for this. Another is the ongoing problems in Latin America, particularly in Brazil, the region's economic hub.