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

Highsnobiety Partners With Citizens Of Culture To Help Lead Its Media Partnerships In Australia
  • Media

Highsnobiety Partners With Citizens Of Culture To Help Lead Its Media Partnerships In Australia

Culture-leading publisher Highsnobiety continues to evolve its local operations with the appointment of Citizens of Culture as its strategic partner across media operations within Australia.  Highsnobiety is a premium global brand dedicated to cultural pioneers, with work spanning across digital platforms, print media, documentaries, cutting edge events, a shopping platform and a full service creative […]

Investigation Reveals That Amazon Destroys Thousands Of Dollars Of Unsold Stock, Including Laptops, TVs And Face Masks
  • Technology

Investigation Reveals That Amazon Destroys Thousands Of Dollars Of Unsold Stock, Including Laptops, TVs And Face Masks

An investigation by British broadcaster ITV has found that Amazon is destroying millions of items in unsold or returned stock. The report specifically focuses on one of the 24 warehouses the company has in the UK. According to ITV News, the destroyed items are largely unused and new, either returned items or those which never […]

by B&T Magazine

B&T Magazine
Witchery Partners With GlamCorner To Boost Subscription Shopping
  • Media

Witchery Partners With GlamCorner To Boost Subscription Shopping

Australian fashion brand Witchery has partnered with B Corp GlamCorner as part of GlamCorner’s subscription box offering as the demand for everyday essentials soars. This partnership marks another milestone for the Australian fashion industry towards becoming more circular and introducing more paths to reduce textile waste. Customers nationally will be able to rent more of […]

Curry Club For COVID-19 Relief, Powered By UnLtd, Challenges AdLand To Raise $100,000
  • Marketing
  • Media

Curry Club For COVID-19 Relief, Powered By UnLtd, Challenges AdLand To Raise $100,000

The media, marketing and creative industries are being encouraged to host their own ‘Curry Club for COVID’ before 30th June to help meet the ambitious $100k target set by its organisers. Curry Club for COVID, which was conceived by long-time adtech executive Peter Bray, sales director at Impact, and is powered by industry social purpose organisation […]

by B&T Magazine

B&T Magazine
UnLtd’s ‘Goals for Good’ Soccer Tournament Celebrates 10 Years
  • Media

UnLtd’s ‘Goals for Good’ Soccer Tournament Celebrates 10 Years

The UnLtd Cup is returning for its tenth consecutive year, marking a decade of soccer shenanigans that’s raised nearly $500,000 for children’s mental health charity, KidsXpress. On July 22-23rd, 28 teams from across the industry will battle it out on the soccer field in the two-day tournament at Sydney University Sports and Fitness Centre, Darlington. […]

Mobile Pnone Shopping Online With A Debit Card
  • Marketing
  • Technology

Ultra Commerce Acquires Vesta eCommerce

Australian-bred company Ultra Commerce has acquired New Zealand-based company Vesta eCommerce, a global software business providing leading product data management solutions. The recent acquisition is a significant move for the business, which is Australian born, owned, and headquartered, but has built out a global presence as it pursues rapid growth in the eCommerce market. Connecting […]

Crater Teams Up With Director Luna Laure For ‘Harry’s Story’, Canteen’s Newest Campaign
  • Campaigns

Crater Teams Up With Director Luna Laure For ‘Harry’s Story’, Canteen’s Newest Campaign

Canteen’s latest campaign features the combined talents of Director Luna Laure and creative agency Crater. The campaign strives to raise awareness for young people affected by cancer. The awareness campaign centres around Harry Barentson, who at 12 years of age found out his pregnant mum had cancer. The campaign aims to bring awareness to Canteen’s […]