Digital Advertising Tech Will Drive Adspend Growth Says ZenithOptimedia
The rapid development of digital advertising technology will help the global advertising market grow 5.3% in 2014, up from 3.9% in 2013, says ZenithOptimedia.
Growth will remain strong over the next two years, staying at 5.3% in 2015 and rising to 5.9% in 2016.
According to ZenithOptimedia’s new Advertising Expenditure Forecasts, we predict that global adspend will grow 5.3% to reach US$523 billion over the course of this year. Internet advertising is by far the fastest-growing medium, which we forecast to expand by 17.1% this year, as improving digital advertising technology makes internet advertising cheaper and more effective. This growth is being driven by a wider spectrum of companies than traditional media, including digital specialists, tech companies, and direct advertisers.
New technology is improving most areas of internet advertising. Improved advertising formats – such as the ‘Rising Stars’ identified by the Interactive Advertising Bureau in the US – are making internet display more interactive and attention-grabbing, with consumers more likely to view, remember and interact with them than older formats.
Meanwhile programmatic buying is evolving to allow more sophisticated and efficient targeting of display audiences, and is becoming better at delivering premium, brand-building experiences. ZenithOptimedia forecasts traditional display advertising to grow at an average of 15.8% a year between 2013 and 2016, up from 12.3% a year between 2010 and 2013.
Social media display is growing much faster – at an average of 29.9% a year between 2013 and 2016 – with advertisers exploiting the explosion of mobile social media use and the ability to target across desktop and mobile. As online video extends to smartphones, tablets, gaming consoles and connected TV sets, it is providing advertisers with a wealth of new opportunities to connect with consumers: we forecast online video advertising to grow by 24.2% a year between 2013 and 2016.
Paid search is being boosted by the adoption of tools that have proved themselves in display, making it more addressable, as platforms give advertisers more control over where, when and to whom their ads are exposed, and also allowing the retargeting of consumers who have previously visited an advertiser’s website with custom copy. We expect these improvements to help paid search maintain an average growth rate of 14.0% a year over the next three years, up marginally from 13.5% over the previous three years.
ZenithOptimedia expects internet advertising to command 23.6% of global advertising budgets this year, exceeding the combined share of newspapers and magazines (22.7%) for the first time. By 2016 we expect the internet to account for 28.3% of global adspend, having narrowed the market share gap between itself and TV – the most dominant medium – from 15.9 percentage points to 9.9.
Mobile is the fastest-growing advertising segment
Mobile internet advertising (by which we mean all internet ads delivered to smartphones and tablets, whether display, classified or search, and including in-app ads) is by far the fastest-growing advertising segment.
This growth is being driven by the rapid adoption of mobile technology by consumers and the introduction of better advertising formats that allow advertisers to engage users creatively, without interrupting their browsing as much as early formats. This year we expect it to grow by 67% – seven times faster than desktop internet – and to account for 20% of all internet advertising. We forecast its share of internet adspend to rise to 25% in 2015 and 30% in 2016 as mobile devices continue to proliferate and diversify.
Mobile advertising is by far the largest contributor to global adspend growth. We expect mobile advertising to grow by US$35 billion between 2013 and 2016, accounting for 42% of all the extra adspend added to the market, followed in distant second and third place by TV (30%) and desktop internet (28%) respectively.
Downgrade in Russia as tensions escalate
Our global forecast for 2014 – of 5.3% growth – is fractionally below the 5.4% growth we forecast in June. The principle cause of the downgrade is the escalation of tensions between Russia and the West over the Ukraine crisis. Russia has responded to trade sanctions imposed by the US and the EU with sanctions of its own, and further deterioration of trade and investment is likely.
We now forecast Russia’s advertising market to grow just 1.7% this year, down from the 6.9% we forecast in June and 9.0% in March. We still expect adspend in Ukraine to shrink by 32.5% this year as commercial activity remains severely disrupted.
Eurozone adspend holds steady
Despite the recent disappointing economic news from the Eurozone – zero GDP growth in Q2 2014, and slowing manufacturing growth over the summer – our forecasts for Eurozone adspend growth are stable at 0.9% this year, marginally ahead of the 0.8% we forecast in June.
Strong signs of recovery in some of the markets worst hit by the financial crisis – Ireland, Greece, Portugal and Spain, where we now forecast 2.9% growth this year, up from the 1.1% we forecast in June – have helped counterbalance weakness elsewhere.
This has been especially visible in France, which we expect to shrink 1.2% in 2014, down from our previous forecast of 0.4% decline. However, advertisers will be keeping a close eye on Eurozone economic activity, and unless the economy picks up in the future we can expect to see some downward revisions to advertising budgets towards the end of the year.
“Internet advertising is expanding rapidly as new technology makes it easier for advertisers to reach the right people at the right time with the right message, at an efficient price. The spread of ever more sophisticated mobile devices will help this expansion continue, sustaining steady growth in global adspend for the next few years,” said Steve King, ZenithOptimedia’s CEO, Worldwide.
Latest News
History Has Arrived: It’s The Cairns Crocodiles Inaugural Shortlist
Pen the acceptance speech and ready your best thongs and muumuu, because the Cairns Crocodiles shortlist has arrived.
Fast And Furious: Top Gear Australia Launch Thrilled Motorheads, Car Entusiasts And Guests
B&T is still no closer to knowing who the new Stig is, except that she is a woman and a ridiculously fast and impressive driver.
TV Ratings (02/05/2024): Seven’s The 1% Club Wins The Night
It was a win for Seven’s The 1% Club last night. The show was the most-watched non-news program with a total TV national reach of 1,485,000. It was followed by Seven’s The Chase with 1,431,000 views and Nine’s A Current Affair with 1,388,000 views. Nine’s Tipping Point has a total TV national reach of 1,363,000 […]
TRA Welcomes Raft Of New Hires; Bolstering Expertise Across Markets
Insights and research agency TRA announces slew of new hires. Still no news on the return of marble wash denim, however.
CX Lavender Hires Boston Consulting Group’s Kim Verbrugghe as Chief Strategy Officer
CX Lavender announces new strategy hire and channels 'acoustic folk act at local RSL' for the publicity pic.
Opinion: Community standards, will they be the death of us?
This columnist is talking community standards. Sadly not those people who put dogs in trolleys in supermarkets.
Tegel gets heads bobbing with new free-range chicken platform
Sure, there's a lot of moral considerations when buying a chook. Yet, not as baffling as buying eggs or canned tuna.
Study: 66% of Aussie men believe masculinity is under attack
Two-thirds of Aussie blokes say masculinity's under attack. That said, sales of Solo lemon drink appear robust.
‘Equal Writes’: Canyon reveals new campaign and refreshed brand for women and non-binary writers
As this brand redesign again proves, nothing beats black on white. Well, white on black in this instance.
Icon Agency bolsters consumer and integrated offer with major hires
Icon Agency unveils new recruits. As press photo confirms office moustache competition now a lay-down misère.
Clemenger launches agricultural graduate program
Has Farmer Wants A Wife triggered an interest in dagging & hay balers? This grads program may resonate.
Levi’s Appoint UM As Global Media Agency For $217m Account
Levi's are the jeans for rockstars, models & the cool kids. Although that's not stopped dads from ruining their image.
QMS Nabs Sean Rigby From oOh!media
Things set to get spicy at the next Outdoor Media Association dinner and dance as a rival gets poached.
Bumble Reveals New Brand Identity To Usher In New Era Of Dating
It's ironic that all the dating apps market themselves as having no weirdos, freaks or mummy's boys like their rivals.
Stay In The House From Up! Airbnb Introduces Icons
Airbnb is now letting people stay in "iconic" places that sadly doesn't include the house from Silence Of The Lambs.
Changing The Conversation: The Role Of Media In Ending Violence Against Women
Governments are finally waking up to the DV crisis. Here, B&T chats with Jasmin Bedir on the role media can play.
“If You Want To Listen To Something Else, Go For It”: Fifi Box On Blocking Out The Noise & Focussing On What Works
No one is at the coal face of Melbourne radio like Fifi Box. Here, she chats with B&T without coughing up a lung.
Spotlight On Sponsors: Ferrari Signs Landmark New Title Sponsor
B&T continuing our series on sports sponsorships. And, yet again, there's little good news for the ten pin bowlers.
Choose A Path Less Trodden This Cannes In Cairns
Not since Wonka opened the factory has there been such a hot ticket in town. Here's how to make the most of Cairns.
Cannes In Cairns MC Keeva Stratton Shares Her Top Session Picks
Quip boss calls out her highlights of the Cannes agenda. We're assuming B&T staff b-boy demonstration was an oversight.
Here Are The Agencies That Made AFR’s Best Places To Work List And What The Industry Can Learn From Them
Did your office not make the list? Make sure your boss shouts at least two schooners at office drinks come Friday.
Get Ready, B&T’s Best Of The Best Is Back With The Top Holding Company Executive Leaders – Creative!
Want to know who the Grandest of the Grand Poobahs in the industry are? Look no further than this exhaustive list.
How A Glittering Campaign Helped The Australian Museum Sell 400,000 Tickets
B&T thoroughly enjoyed the Ramses exhibition at The Australian Museum, despite thinking we were going to the Archibald.
TV Ratings (30/04/2024): A “Shoey” Straight From A Fish’s Mouth Launches The Cheap Seats Into 2024
Last night's TV saw horny farmers beat Lego nerds, who beat fame-obsessed home cooks, who beat a chap with a large fish.
Spotlight Extends Partnership With Starlight Children’s Foundation
B&T always happy to promote the excellent work of the Starlight Foundation. Less so the Starfish Fanciers Foundation.
Amazon’s Advertising Quarterly Revenue Soars To $11.8bn
There are so many Amazon couriers visiting B&T headquarters at the moment our office dog doesn't know who to maul first.
VML Wellington Welcomes Jacob McGregor As Pou Ārahi Māori
McGregor set to lead cultural competency and safety at VML Wellington in important new gig.
“They Grow Up So Fast”: Simon Fowler On Five Years Of ABEL
Abel's CEO talks lessons learned from the agency's first five years. Including staff nicking all the Nespresso capsules.
Kyle & Jackie O Urge Melbourne To Pick A Side
Who can stop Kyle & Jackie O's indelible march into Melbourne radio? Is Peter 'Moony' Moon waiting by the phone?
Future & Taika Waititi Feature In Striking New Global Belvedere Campaign
Not only does drinking vodka make you cool like these dudes, it also has great weight loss properties for the bone idle.
The Fall Of Bonza: A Case Study In How To, And Not To, React In A Crisis
Does the collapse of yet another budget airline hark back to a gentler time of 17 hours spent on a Greyhound bus?
Opinion: Agencies, Be Unique – Stop Using The Word “Unique!”
Trinity P3's Ellie Angell says agencies are overusing the word unique. You could add omnichannel & holisitic to that.
Ex Marketing & Advertising Exec Releases Melanoma Memoir
Ex-adlander Anne Gately has penned a tome to skin cancer. Which is a handy reminder to check your moles, people.
Mamamia Appoint Danni Wright As New Head Of Strategy
Danni Wright takes up Mamamia's strategy reins with a feng shui expert called over positioning of office chaise lounge.
From The Bureau: Championing Competency & Cross-Industry Collaboration
The IAB's Jonas Jaanimagi calls for more specialisation in adtech. Meaning you'll understand it less than you already do.
Rumble Nabs Renee Park From Cutting Edge
Rumble has recruited Renee Park as one of its new sound designers. And it's only right to make some noise about it.