Internet advertising to lead industry recovery
The global advertising market is on a path of ‘steady recovery’, with growth of 3.5% forecast for 2013, followed by 5.1% in 2014 and 5.8% in 2015, according to the latest Advertising Expenditure Forecasts from ZenithOptimedia.
The 2013 Q2 report reflects an increase in forecast growth for 2014 and 2015, by 0.1 and 0.2 percentage points, respectively – compared with figures for the Q1 report, but a downgrading of 0.4 percentage points for 2013.
The recovery in 2014 and 2015 is expected to be led by internet advertising – the principal engine of adspend growth. ZenithOptimedia is forecasting internet advertising to increase by an average of 15% year on year between 2012 and 2015, and that it will contribute to 66% of all growth in ad expenditure across the globe.
The growth, according to ZenithOptimedia, is being driven by ‘digital innovations’ – such as better measurement of exposure to advertising, greater localisation, and integration with mobile devices – and online video and social media, which continue to grow at approximately 30% year on year.
ZenithOptimedia is forecasting mobile – the fastest growing area of internet advertising – to grow by 67% in 2013 and at an average of 51% a year between 2012 and 2015, primarily driven by the rapid adoption of smartphones and tablets.
By contrast, it is forecast that desktop internet advertising will grow by just 10% a year.
ZenithOptimedia estimates that global mobile adspend totalled £5.5 billion in 2012, representing 9.8% of internet spend and 1.8% of advertising across all media.
By 2015, it is forecast that this total will increase to approximately £19 billion – 21.9% of internet expenditure and 6.1% of all expenditure.
The report predicts that global ad expenditure for 2013 will grow at 3.5% – the same rate as 2012. The two key factors behind this stunted year on year growth are the continuing recession in the eurozone, and security concerns in South Korea.
The economic recovery that economists hoped to see in the eurozone in the second half of 2013 appears to have been postponed until the beginning of 2014. The report expects to see adspend fall -3.9% across the eurozone in 2013, down from the -1.6% decline that was predicted in April.
However, this is an improvement on the -5.2% decline experienced in 2012.
Assuming that the eurozone economy begins to recover at the end of 2013, ZenithOptimedia expects ad expenditure to stabilise in 2014 – growing by 0.8% – followed by slow recovery in 2015, with 1.8% growth that year.
“The global advertising market is continuing to show steady growth on its path of recovery,” said Steve King, CEO, Worldwide, ZenithOptimedia.
“Internet advertising is driving adspend growth, and after several years of market expectation, mobile is at the forefront of this. Mobile devices are now integral parts of the lives of many consumers around the world, but still present huge untapped potential for marketers to engage with consumers in a personal, interactive and highly effective way.”