- PV Sindhu Enters Quarter-final of Hong Kong Open Super Series
- Padmavati cleared for Dec 1 release in Britain, SC allows advocate to file fresh plea
- Bharti family pledges Rs 7000 crore towards philanthropy
- Indian Navy gets its first woman pilot, 3 women NAI officers
- Colonel arrested for raping Lt- Colonel's daughter in Shimla
- Pradyuman murder case: Ashok was beaten, tortured and sedated to force his confession, claims wife
- Election Commission grants 'two leaves' symbol to unified AIADMK
Global ad spend set to return to pre-financial crisis growth rates: ZenithOptimedia
MUMBAI: Advertising will continue to strengthen over the next three years, with global ad spend growth forecast to rise from 3.9 per cent in 2013 to 5.5 per cent in 2014. Growth is then set to increase to 5.8 per cent in 2015 and 6.1 per cent in 2016. This growth will be driven by improvement in the global economy, the spread of programmatic buying and the rapid rise of mobile advertising.
According to ZenithOptimedia’s new ‘Advertising Expenditure Forecasts’, global ad spend will be boosted this year by the three ‘semi-quadrennial’ events—the Winter Olympics, the football World Cup, and the mid-term elections in the US—which will benefit television in particular.
Advertisers are also gaining in confidence as growth returns to the Eurozone, which now looks more stable and less likely to deliver negative shocks to the world economy. In general, advertisers are in a strong position to invest in expansion, with large reserves of cash and high profitability. In view of this, ZenithOptimedia expects growth to increase in each of the three years it has forecast.
Eurozone returns to growth
The Eurozone emerged from recession last year, and its recovery appears to be gathering pace. This has encouraged advertisers to start to commit higher budgets to the region, which has suffered a 15% drop in ad spend since the financial crisis began in 2007. Eurozone ad spend shrank 3.0% in 2013, but this was loaded towards the front of the year; by the end of the year, several key media owners were reporting growth in their ad revenues.
The report now forecasts Eurozone ad spend to grow 0.7% this year, achieving its first year of growth since 2010. Finland, Italy and Greece are still shrinking, but should stabilise next year, helping the Eurozone to accelerate to 1.6% growth in 2015 and 1.7% in 2016.
Television remains dominant
Television is still by some distance the dominant advertising medium, attracting 40% of spend in 2013, nearly twice that taken by the internet (21%). TV offers unparalleled capacity to build reach, and establish brand awareness and associations.
ZenithOptimedia forecasts television ad spend to grow 5.2% in 2014, up from 4.4% in 2013, as it gains the most of the benefits of the Winter Olympics, football World Cup and mid-term US elections.
Programmatic buying to boost internet display
The internet is still the fastest-growing medium by some distance. It grew by 16.2% in 2013, and will see an average of 16% annual compounded growth for 2014 to 2016. The fastest-growing sub-category is display, which is forecast to grow at 21% a year to 2016. Traditional display (banners and other standard formats) is growing at 16% a year, boosted by the revolution in programmatic buying, which provides agencies and advertisers with more control and better value from their trading.
Social media (growing at 29% a year) and online video (23% a year) are also starting to benefit from programmatic buying, which is helping to sustain their rapid growth. The report expects internet display to overtake paid search (which is growing at 13% a year) for the first time in 2015. In 2016 internet display ad spend is expected to total $74.4 billion, while paid search ad spend will total $71.1 billion.
Continued growth of mobile
Mobile advertising has now truly taken off and is growing six times faster than desktop internet. According to the forecast, mobile advertising will grow by an average of 50% a year between 2013 and 2016, driven by the rapid adoption of smartphones and tablets. By contrast, the report predicts desktop internet advertising to grow at an average of 8% a year.
The agency estimates that global expenditure on mobile advertising was $13.4 billion in 2013, representing 12.9% of internet expenditure and 2.7% of advertising across all media. The report forecasts this to rise to $45 billion by 2016, representing 28% of internet expenditure and 7.6% of all expenditure. This means mobile will leapfrog radio, magazines and outdoor to become the world’s fourth-largest medium by the end of the agency’s forecast period.
ZenithOptimedia CEO, Worldwide Steve King said, “Advertisers are gaining in confidence as the world economy returns to stable growth. They will find plenty of opportunities to generate strong returns on their advertising investment in the fast-growing digital media, but should remember that television has lost none of its power to reach large and engaged audiences.”