In 2018, global mobile ad spend will overtake desktop and account for 50.2 per cent of all internet advertising, according to ZenithOptimedia’s ‘Advertising Expenditure Forecasts’.
The report says that global mobile advertising will total US $114 bn in 2018, up from $50 bn in 2015, and will be larger than all other media except for television. TV spends are predicted to go up to US $215 bn, up from US $206 bn in 2015.
The report adds that mobile advertising will be responsible for almost all of the growth in global ad spend. The report forecasts it to grow at an average rate of 32 per cent a year between 2015 and 2018, and to contribute 87 per cent of all new ad dollars.
ZenithOptimedia forecasts desktop internet advertising to peak at US $114 bn in 2017, before falling back slightly to US $113 bn in 2018.
India to grow at 13 per cent
India, Indonesia and the Philippines are predicted by the study to be the only markets in which adspend will grow at double-digit rates annually. India will grow upto 2018 by 13 percent, accounting for an expansion by 3 bn.
Anupriya Acharya, group CEO, ZenithOptimedia, India, said, "It’s been over 18 months of the new government led by Prime Minister Narendra Modi. Last year this time it had captured the collective consciousness of the country and we entered 2015 with a strongly positive consumer and business sentiment. This irrational exuberance has tempered down to a more rational optimism and all the current economic and sentiment indicators suggest that the forward view remains positive. Our growth forecast for India ad-expenditures for 2016 holds at 13 per cent. TV largely fuels this at 15 per cent and print - newspapers - at 10 per cent. Digital is expected to grow upwards of 20 per cent while all other media are expected to grow at between 5 and 10 per cent. E-commerce, telecom, mobile phones are expected to have the maximum growth followed by auomobiles and FMCGs."
Programmatic to contribute 60 per cent of digital display in 2016
According to the agency’s ‘Programmatic Marketing Forecasts’, programmatic advertising will account for more than half of digital display advertising (53 per cent) for the first time this year, and will increase its share to 60 per cent in 2016, globally. Programmatic advertising accounted for just 12 per cent of display adspend in 2012.
The report notes that programmatic adspend grew from US $5 bn in 2012 to US $38 bn in 2015, growing at an average rate of 100 per cent a year. The report expects programmatic advertising to grow another 34 per cent in 2016 and 26 per cent in 2017, at which point two thirds of global display will be programmatic.
Internet to overtake TV in 2018
Television, the current dominant advertising medium, with a 38 per cent share of total adspend in 2015 will be replaced by the internet in 2018 as the single largest advertising medium.
The study suggests that television’s share globally peaked at 39.7 per cent in 2012, estimates it to grow at 37.7 per cent in 2015, and fall back to 34.8 per cent by 2018.
Digital editions to boost magazine ad revenues by 2 per cent in 2016
The report suggests that advertising in printed magazines is in decline across most of the world; with a projection in the US of it to shrink by 1.8 per cent in 2016. However, ZenithOptimedia estimates that US magazine publishers generate 20 per cent of their revenues from digital editions, and these revenues are growing rapidly. Taking these digital revenues into account, the report predicts that magazine publishers will enjoy an overall 1.8 per cent increase in total revenues next year.
Quadrennial to boost ad spend by US $6.1 bn in 2016
The world advertising market has been stable since 2011, growing at about 4 to 5 per cent and the agency expects this growth to continue at least until 2018. The year 2016 will be relatively strong, with 4.7 per cent growth in adspend, up from 3.9 per cent in 2015, it predicts.
2016 has been labelled a ‘quadrennial’ year, when ad expenditure is expected to rise by the US presidential elections, the Summer Olympics (in Brazil) and the UEFA football championship (France).
The report estimates that the Olympics will lift global adspend by a new US $2 bn, especially in television and outdoor. UEFA Euro 2016 will boost adspend by US$ 0.9 bn, also concentrated in television and outdoor, mainly in Europe but also in Latin America and Asia Pacific, according to the study.
While India is growing, adspend growth is slowing down in three out of the four BRIC markets that were responsible for much of last decade’s ad market expansion, says the study. Between 2005 and 2010 adspend grew at an average rate of 10.7 per cent a year in Brazil, 10.3 per cent in Russia and 16.9 per cent in China. Brazil and Russia are now in recession, and China is slowing down, and between 2015 and 2018 ZO expects annual growth to slow to 3.5 per cent in Brazil, 5.3 per cent in Russia and 7.5 per cent in China. Russia and China will continue to beat the global adspend growth rate, however, it said.
Steve King, CEO, ZenithOptimedia Worldwide, said, “Growth of the global ad market is being driven by advances in technology, especially mobile and programmatic tech. But television remains by far the most important channel for brand communication, and online video, its digital offshoot, is increasing the audiovisual share of global display advertising.”