Zenith Media predicts global ad spend will grow 4.8 percent this year, reaching $579 billion in its latest advertising expenditure forecast released today. The company also forecasts that digital advertising share of total spend will continue to grow, reaching 40.2 percent this year compared to 37.6 percent last year.
As several agency executives have pointed out, several high profile events this year will boost global ad spend. “The global ad market grew by 4.0 percent last year,” said Jonathan Barnard, Zenith’s head of forecasting and director of global intelligence. “After a jump in confidence, we now expect it to grow substantially faster this year, boosted by the Winter Olympics, football World Cup and US mid-term elections.”
But Zenith, an agency owned by Publicis Groupe, also believes continued growing investment in digital will drive up total ad spend. The company says that digital ad spend has maintained steady growth despite last year’s concerns over the state of the digital advertising supply chain, and threats from big advertisers to cut digital spending until circumstances improved.
The agency claims that online advertising actually grew by 13.7 percent last year, with its 37.6 percent share of total ad spend up from 34.3 percent in 2016, and predicts that by 2020, it will account for 44.6 percent of total global ad spend.
Online video and social media are credited with driving this growth. “Online video is benefiting from the increasing availability of high-quality content, and improvements to the mobile viewing experience, such as better displays and faster connections,” says an executive summary released by Zenith. “And for many consumers, checking their mobile devices for social media has become a regular, ingrained habit, while social media ads blend seamlessly into their mobile app news feeds.”
In fact despite TV’s falling share of global ad revenue, the report declares that audiovisual as a whole (TV and digital video combined) is “consolidating its dominant share of display advertising”. Zenith argues that TV and digital video are complimentary in a sense, with television still offering the best way for brands to build reach, while online video offers targeting and personalisation for marketing messages.
“We estimate that audiovisual advertising accounted for 48.4 percent of display advertising in 2017, up from 43.6 percent in 2010, and expect its share to rise to 48.8 percent in 2020,” says the report.
TV has seen its share of ad spend fall largely due to the rapid growth of search, according to Zenith, and while it forecasts that TV’s share will fall to 31.2 percent in 2020, its lowest share since 1981, it’s still predicted to be the second largest contributor to ad spend growth between now and 2020.
Mobile internet, expected to contribute $72.6 billion to global ad spend growth between 2017-2020, is predicted to cannibalise internet desktop, which will retract by $4.5 billion. Meanwhile TV is expected to remain a positive contributor, adding $6.9 billion to ad spend growth in the same period.