Global ad expenditure will grow at a slower rate than of 4% in 2017, driven by digital formats such as video, paid content, native and in-feed social media ads, according to research from Zenith.
The Publicis media agency’s latest Advertising Expenditure Forecasts gave a global growth figure that was down against previous reports in June (4.2%) and March (4.4%).
Native and social ads grow as search falls
Zenith said that “innovative” ad formats like video, paid content, native and in-feed social media ads will drive a combined 14% annual growth in global display advertising between 2016 and 2019.
Overal, display will encompass 50.4% of internet advertising expenditure by 2019, while social media will by rise 20% a year and video at 21%.
Paid search growth lags behind at a rate of 10% growth annually, reaching a value of $103bn by 2019, since the format was usurped by display in 2015. It may be due a resurgence as voice interfaces like Alexa and Siri threaten to open up new channels in consumers’ mobiles, automobiles and homes, however.
The report claimed that video and TV were blurring with as smart TVs and other devices started to cross these lines. It “makes less and less sense to plan television and online video separately: they work best as complements rather than substitutes,” said the report.
Separated from classified and search, TV and online video accounted for 48.5% of expenditure on brand advertising in 2016, up from 43.7% in 2010.
Classified ads also continue to decline as monetisation is overtaken by free listings, auction sites and other substitutes. Advertisers spent $17bn on internet classifieds in 2016, that will grow by 7% annually to $21bn in 2019, the report forecast.
Ad spend growth by country
Zenith is now predicting global ad expenditure to reach $558bn (£423bn), with a marginal downgrade for Western Europe, which is set to grow 2%, down from 2.2% forecast in June.
North America, which Zenith said has suffered from declining network US TV ratings, is expected to grow by 3.6% this year, while Western Europe’s growth had been “dragged down” by economic uncertainty in the UK, which is currently negotiating its exit from the European Union.
Asia-Pacific and Latin America forecasts also saw marginal downgrades, but there were upgraded growth forecasts for North America and Central & Eastern Europe.
Next year Zenith expects a 4.2% growth in global adspend, boosted by the Winter Olympics in Korea, the football World Cup in Russia, and the mid-term elections in the US.
“Combine new and old media”
Jonathan Barnard, head of forecasting and director of global intelligence at Zenith, said: “Internet display is coming into its own as a brand-building media, powered by social media and online video but the distinctions between online video and traditional television are being eroded, and the two work together much better than they do separately.”
Vittorio Bonori, Zenith’s global brand president, added: “Internet platforms are continually innovating to provide advertisers with new ways of communicating with consumers. But newer doesn’t always mean better, and agencies must use all the data and technology available to them to determine how to combine new and old media to tell brand stories most effectively.”
Source: https://www.zenithmedia.com/