Global adspend to accelerate in 2016
The latest adspend forecasts from ZenithOptimedia predict that the ad market is heading for 4.6% growth this year, up from 3.9% growth last year.
Global advertising expenditure will total US$579bn this year, and will exceed $600bn in 2017, reaching $603bn by the end of the year – all despite uncertainty and challenges in the global economy.
Slowdown in China, recession in Brazil and Russia, uncertainty over the EU and the ongoing migration crisis have not shaken advertisers with the forecasts hardly changing since the last was published in December 2015.
Zenith states that it is remaining optimistic due to rapid recovery from the markets most affected by the eurozone crisis, and the emergence of rapidly growing markets that are now opening up to international advertising.
“Rapid growth from countries that are relatively new to the international advertising market, combined with a resurgence of established markets that were damaged by the financial crisis, will keep the global ad market on track for healthy growth for at least the next few years,” said Jonathan Barnard, head of forecasting at ZenithOptimedia.
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In the short term, ad expenditure is set to be boosted by the US presidential elections, the Summer Olympics and the UEFA football championship in Europe. Zenith expects these events to add a net $6.1bn to the global ad market in 2016 – $3.2bn from the elections, $2.0bn from the Olympics and $0.9bn from the football.
In the medium term, most of the European ad markets that suffered the deepest cuts from the financial crisis and its aftermath are now “enjoying sustained recovery” and will “expand rapidly” over the next few years, Zenith said.
As usual, “internet advertising” is the main driver of global adspend growth. Zenith said it expects internet advertising as a whole to grow at more than three times the global average rate this year – by 15.7%, driven by social media (31.9%), online video (22.4%) and paid search (15.7%).
Internet advertising’s growth rate is slowing as it matures (it was 21.1% in 2014), but Zenith expects it to “remain in double digits” for the rest of its forecast period.
The great majority of new internet advertising is targeted at mobile devices, Zenith said, and forecasts that mobile advertising expenditure will increase by US$64bn between 2015 and 2018, growing by 128% and accounting for 92% of new advertising dollars added to the global market over these years.
“It’s unsurprising to see that mobile advertising is set to be the driving force behind a growth in ad spend in the coming years,” said Paul Carolan, UK commercial director at mobile specialists Widespace.
“This year, for example, we’re expecting events like the Olympics and the UEFA championship to drive ad spend – and advertisers will undoubtedly be focused on connecting with consumers on the go as they interact with these events.
“In a broader sense, Zenith’s figures are indicative of digital marketers increasingly recognising the potential of mobile as a highly personalised, highly engaged environment. My advice to marketers looking to maximise this opportunity would be would be to focus on high-quality advertising with engaging formats that add to a consumer’s mobile experience.”