Global Online Ad Spend To Surpass US$200bn (& TV) In 2017: Zenith

Global Online Ad Spend To Surpass US$200bn (& TV) In 2017: Zenith
SHARE
THIS



This year will be the first time that more advertising money will be spent on internet than TV globally, according to a new report by Zenith.

The group’s Global Advertising Expenditure report found that global internet advertising expenditure will grow 13 per cent to US$205 billion in 2017, with the worldwide web to attract 36.9 per cent of all advertising expenditure – up from 34. per cent in 2016.

In comparison, traditional TV advertising spend will total US$192 billion.

However, the sheer scale of internet advertising means its growth rate is slowing. Internet ad spend grew 17 per cent in 2016, down from 20 per cent in 2015, and growth is expected to slow to 13 per cent in 2017, 12 per cent in 2018 and 10 per cent by 2019, according to the report.

The report found that the Aussie advertising market finished 2016 with growth of 3.8 per cent, slightly higher than Zenith originally forecast.

Digital expenditure continues to be the main driver of total market inflation in Australia with growth of 15 per cent in 2016. Mobile and online video spend in particular fuelled this growth in 2016.

TV revenue was down 3.9 per cent, continuing to be under pressure from audience declines and the growth of digital.

Print also continued to decline, although the pace is now starting to slow. Press declined by 13.4 per cent in 2016 and is now only 11 per cent of total ad spend versus being more than 25 per cent just five years ago, while magazines were down 17.7 per cent.

Out-of-home grew by 7.9 per cent in Australia, benefiting from the increase in supply and quality of inventory as static panels are converted to digital formats. Radio also grew, up 5.8 per cent, with increased spend from big spending categories like retail and automotive, Zenith found.

Zenith Australia CEO Nickie Scriven said: “Looking forward into 2017, we are forecasting growth to be at 3.4 per cent.

“Digital will continue to be the main driver of this growth. Radio and out-of-home growth will moderate slightly and we continue to forecast declines in TV and print.

“Our 2017 revenue forecast is behind 2016’s growth, but still above overall economic growth in Australia, which will be around 2 per cent in 2017.

“Overall consumer confidence is flat, with consumers having a cautious outlook around economic indicators like cost of housing, rising commodity costs and unemployment growth. Despite this, major advertising categories like retail, automotive, finance and travel continue to have modest growth in their spend.”

Social media to overtake newspaper advertising in 2019

Zenith forecasts advertising expenditure on social media to reach US$55 billion in 2019, overtaking advertising expenditure on printed newspapers, which will total US$50 billion.

Social media advertising is the fastest-growing component of internet advertising – growing 51 per cent in 2016, and Zenith forecasts it to grow at an average rate of 20 per cent a year to 2019.

Meanwhile, the report shows newspaper advertising is shrinking by 5 per cent a year as circulations continue to fall. Newspaper ad spend has shrunk every year since peaking at US$113 billion in 2007, and by 2019 will be back to levels last seen in 1985 – and that’s without adjusting for inflation.

Zenith noted that these newspaper figures only include advertising in printed editions – newspapers’ online revenues are included in the internet advertising total.

Long streak of steady global ad spend growth to continue

The global ad market has grown at a steady pace of 4 to 5 per cent a year since the beginning of the decade, and Zenith expects it to continue to do so through to 2019.

Its forecast for 2017 is for 4.4 per cent growth (unchanged since it last published its forecasts in December), down slightly from 4.6 per cent growth in 2016, and predicts 4.4 per cent growth in 2018 and 4.2 per cent growth in 2019.

Advertising growth is concentrated in big cities

Zenith estimates that just 10 cities will contribute 11 per cent of all the growth in global ad spend between 2016 and 2019: in descending order of contribution – New York, London, Los Angeles, Jakarta, Tokyo, Shanghai, Manila, Beijing, Dallas and Houston.

Last year, US$61 billion was spent targeting the population of these 10 cities, and Zenith forecasts this total to rise to US$69 billion by 2019.

The top 50 will contribute 27 per cent of total global growth, and the top 250 will contribute 50 per cent.

New York is the world’s most important city for advertising, where US$15 billion will be spent this year, followed by Tokyo (US$13 billion), Los Angeles (US$9 billion), London (US$8 billion) and Chicago (US$6 billion).

 

Please login with linkedin to comment

Forbes Magazine Zenith

Latest News

Starts At 60 Makes Two Executive Appointments
  • Media

Starts At 60 Makes Two Executive Appointments

Mature-age media platform Starts at 60 has welcomed two new leaders to its executive team as it looks to scale up and broaden its commercialisation. Amena Reza (pictured above, right) moves into the role of chief operating officer. She was formerly the managing director of ML Design, and is a chartered accountant and a non-executive […]

HubSpot Creates ‘Marketing Hub Starter’ For Small Businesses
  • Marketing
  • Technology

HubSpot Creates ‘Marketing Hub Starter’ For Small Businesses

Marketing software player HubSpot has launched Marketing Hub Starter, a new software offering that aims to give growing teams the tools they need to start marketing right. This new tier of HubSpot’s platform is designed with small businesses in mind, consolidating the capabilities of existing disparate marketing tools into one platform and offering an affordable […]

Market Research Industry Cracks Down On Shonky Behaviour With New Digital Platform
  • Marketing

Market Research Industry Cracks Down On Shonky Behaviour With New Digital Platform

The Association of Market and Social Research Organisations (AMSRO) has launched a digital platform to highlight fake or illegitimate research activities to the public. ‘Phish of the Day’ enables AMSRO members, as well as the general public, to report any scams or non-genuine market and social research activities to the association. These might include telemarketing […]

Pooled Energy Appoints Magnum & Co And The Wired Agency
  • Advertising
  • Marketing

Pooled Energy Appoints Magnum & Co And The Wired Agency

Swimming pool electricity retailer Pooled Energy has appointed Magnum & Co and sister agency The Wired Agency to its roster, following a competitive pitch. Magnum & Co will handle Pooled Energy’s social media and PR, while The Wired Agency has been appointed to manage the company’s search and display advertising. Both agencies will collaborate with […]

Masculinity Roasted In Clever New Ad
  • Advertising
  • Campaigns

Masculinity Roasted In Clever New Ad

Think masculinity means drinking a case without chundering? Well, rediscover it (& possibly yourself) with this top ad.

by B&T Magazine

B&T Magazine
WPP AUNZ Partners With Career Trackers Indigenous Internship Program
  • Advertising

WPP AUNZ Partners With Career Trackers Indigenous Internship Program

Advertising and marketing network WPP AUNZ has joined the Career Trackers Indigenous Internship Program as part of its commitment to a diverse workforce, and the creation of opportunities that inspire excellence. As part of the program, WPP AUNZ has welcomed its first three interns: Abi-Leigh Dillon (WPP AUNZ), Amy Mccutcheon (MediaCom) and Jacinta Evans (Ogilvy), […]

Taboo Goes On A Hiring Spree
  • Advertising

Taboo Goes On A Hiring Spree

Taboo has gone a hiring spree. And when it comes to sprees, that's far better than a shooting one or a farting one.

M&C Saatchi Group’s 1440 Shuts Up Shop
  • Marketing

M&C Saatchi Group’s 1440 Shuts Up Shop

Sadly, M&C Saatchi's 1440 is no more. And chances of it being reborn as 1550 not looking much chop either.

by B&T Magazine

B&T Magazine
Luke Kelly Becomes A Partner At HBT
  • Advertising
  • Marketing
  • Technology

Luke Kelly Becomes A Partner At HBT

B&T's not sure what's with that twirly thing in the press photo, suffice to say a vortex to an alternate dimension?

Women In Media Profile: Alison Michalk
  • Media

Women In Media Profile: Alison Michalk

If B&T's Women in Media profiles were an animal they would be a gazelle or lioness, or even a lioness eating a gazelle.

by B&T Magazine

B&T Magazine
Grant Broadcasters Makes Several Changes To Senior Executive Team
  • Media

Grant Broadcasters Makes Several Changes To Senior Executive Team

Independent media company Grant Broadcasters has announced a number of changes to its executive ranks. Grant Cameron will move up to become non-executive chairman for the company, and Alison Cameron (pictured above) – currently the chief operating officer – will assume the CEO role. Dugald Cameron remains responsible for the family’s investment portfolio and is […]

Shopper Media Group Partners With Mist To Offer New Tech & AI-Driven Capabilities
  • Advertising
  • Media

Shopper Media Group Partners With Mist To Offer New Tech & AI-Driven Capabilities

Australian retail out-of-home (OOH) business Shopper Media Group (SMG) has announced a partnership with AI-powered wireless networks provider Mist. The partnership will see SMG offer new WiFi, analytics and location-based services across the company’s portfolio of Australian shopping centres. Mist currently provides WiFi and location services using virtual Bluetooth LE technology to businesses across all […]

Indy Agency This Is Flow Wins Cruiseco’s $5 Million Media Account
  • Advertising
  • Media

Indy Agency This Is Flow Wins Cruiseco’s $5 Million Media Account

Travel organisation Cruiseco has announced the appointment of Sydney independent agency This is Flow (TIF) to handle its $5 million media account. This is the first time Cruiseco has appointed an agency, having managed its communications internally. Cruiseco is the largest and broadest distributor of cruise products in the Southern Hemisphere. With a membership base […]

Women In Media Profile: Naomi Shepherd
  • Media

Women In Media Profile: Naomi Shepherd

Need a Monday morning pick-me-up? You could stand naked next to the office fridge or read these inspiring words.

by B&T Magazine

B&T Magazine
APN Outdoor Takes Off With Queenstown Airport Contract
  • Advertising
  • Media

APN Outdoor Takes Off With Queenstown Airport Contract

Out-of-home media business APN Outdoor has won the tender for New Zealand’s Queenstown Airport. As part of the new agreement, APN Outdoor has flagged extensive development plans for Queenstown Airport’s advertising assets. The new contract adds Queenstown Airport to APN Outdoor’s existing portfolio of Auckland and Christchurch Airports. The media company will hire a South […]