The latest update of Zenith's Advertising Expenditure Forecasts report, which was published on Monday, paints a pretty positive picture of the global ad market. Jonathan Barnard, head of forecasting and director of global intelligence at Zenith gives his take on the latest report.
We’re forecasting 4.5 per cent growth for this year, plus 4.2 per cent in 2019 and 2020. We’ve downgraded our forecast for 2018 slightly from the 4.6 per cent we forecast back in March, but that’s mainly because we’ve increased our estimate for last year, providing a tougher comparison. In dollar terms, we’re forecasting that US$580bn will be spent on global advertising this year, US$1bn more than we forecasted three months ago.
We expect it Asia Pacific contribute 43 per cent of all the new ad dollars added to the market between 2017 and 2020 – US$32.1bn out of the US$75.1bn total. Six of the ten markets that will contribute the most to global growth are in Asia Pacific: China (which by itself will account for 22 per cent of global growth), India (which will contribute five per cent), Indonesia (four per cent), Japan (three per cent), the Philippines (three per cent) and South Korea (two per cent). We forecast that Asia Pacific will account for 33.8 per cent of global adspend in 2020, up from 32.6 per cent in 2017.
Book now to save: fippasia.com
North America, currently the largest advertising region, is falling behind in growth. We expect it to contribute 27 per cent of new ad dollars between 2017 and 2020, while its share of global adspend slips from 37.1 per cent to 36.0per cent.
Looking at adspend by medium, the continued rise of mobile advertising remains the stand-out trend. As internet users switch from desktop to mobile devices – and new users go straight to mobile – online advertising is making the same switch. Advertising on mobile devices is rising at a meteoric rate, and is taking market share from all most other media. Mobile adspend grew 35 per cent in 2017, and we expect it to grow at an average rate of 21 per cent a year to 2020.
We now expect mobile advertising to account for 30.5 per cent of global advertising expenditure in 2020, up from 19.2 per cent in 2017. Expenditure on mobile advertising will total US$187bn in 2020, more than twice the US$88bn spent on desktop advertising, and just US$5bn behind the US$192bn spent on television advertising. At the current rate of growth mobile advertising will comfortably overtake television in 2021.
Most of the traditional media are still growing despite the inexorable rise of mobile advertising, but generally at very low rates. We forecast television and radio to grow by one per cent a year between 2017 and 2020, while out-of-home advertising grows by three per cent a year. Cinema, however, is growing at 16 per cent a year, thanks to investment in new screens, successful movie franchises, and better international marketing. The main driver, though, is surging demand in China, where ticket sales increased 22 per cent in 2017. China overtook the US to become the world’s biggest cinema advertising market in 2017, worth US$1.2bn, and by 2020 we expect it to reach US$2.8bn.
Print advertising continues to shrink together with circulations: between 2017 and 2020 we forecast newspaper adspend to shrink by an average of five per cent a year, while magazine adspend shrinks by six per cent. This refers only to advertising within print titles, though – publishers’ online revenues are counted within the desktop and mobile internet totals, so their overall performance is not as bad as the print figures suggest. Research organisations in some markets – such as the Advertising Association/WARC in the UK – provide combined print and digital ad revenue figures for publishers, generally showing that the digital revenues soften but do not reverse the decline in print.
Download Zenith's executive summary here.
Get stories like these ever week directly in your inbox. Subscribe to our (free) FIPP World newsletter.
More like this
This week ecommerce monetisation specialist Tipser delivered a unique webinar analysing current ecommerce trends. The session included a deep-dive look into the company’s ecommerce strategy work with InStyle magazine.21st May 2020 Insight News
Search terms that were trending in the UK in the food category during the heart of lockdown were - surprisingly - not “home delivery” as many would have expected but rather “Heinz”, “Jigsaw”, “Puzzle” and “Kodak”. Why? Both Heinz and Kodak offered customers puzzles, an answer to lockdown boredom.21st May 2020 Insight News
The latest FIPP Insider webinar saw FIPP President and CEO, James Hewes, and CEO of World Newsmedia Network, Martha Williams, joined by speakers from Mather Economics and Atlantic Media, in a look at data driven pricing strategies.18th May 2020 Insight News
The BBC has released the results of its latest 50:50 Gender Equality Report, which charts the success of the content produced by the BBC and partner organisations in achieving a 50:50 gender balance between male and female on-air contributors.12th May 2020 Insight News
The FIPP World Media Congress is going online for the first time in its 95-year-old history, running over four weeks from 2-30 September 2020.21st May 2020 FIPP News
Audience engagement and brand sampling agency, Gold Key Media, has teamed up with Project Wingman and helped to set up an initiative to supply NHS staff in hospitals across the UK with free samples of well-known brands along with a wide range of complimentary magazines and newspapers in print and in digital.19th May 2020 Industry News
Vogue Business today announced the launch of The Tech Edit podcast, a weekly podcast series which will explore how technologies and innovations are shaping the future of fashion, luxury and retail. The Tech Edit is hosted by Vogue Business’ Innovation Editor, Maghan McDowell, who is based in the San Francisco Bay Area.19th May 2020 Launches
One of the most damaging aspects of the Covid-19 outbreak is the psychological impact on people forced to work from home. With the pandemic threatening to stretch out for many more months, managing the mental health of your workforce has become a priority for the publishing industry.19th May 2020 Features
This Wednesday 20th May, Travel + Leisure India & SA will host a unique webinar, bringing together a panel of global editors, to discuss the future of luxury travel.18th May 2020 Industry News
Visit our Youtube channelFIND OUT MORE
FIPP newsletters allow you to keep up with industry trends, research, training and events across the worldFIND OUT MORE
What’s happening now, what’s coming next