Strengthening economy to boost global advertising growth from 3.9% in 2013 to 5.6% in 2015
ZenithOptimedia predicts global advertising expenditure will grow by 3.9% in 2013, reaching US$518bn by the end of the year. As has been the case since the start of the economic downturn in 2007, this growth will be led by Rising Markets*, which we forecast to grow by 8.2% on average in 2013, while the Mature Markets grow by just 1.8%, weighed down by the eurozone crisis. Over the next two years, we expect growth to pick up in both Rising and Mature Markets, reaching 9.4% and 3.5% respectively in 2015.
Internet advertising driving growth
Internet advertising is supplying most of the growth in expenditure by medium, driven by technical innovations, such as better measurement of exposure to advertising, greater localisation, and integration with mobile devices. We forecast internet advertising to grow by 14.4% in 2013, while traditional media will grow by 1.6%.
Display is the fastest growing medium within internet advertising, with annual growth of 20%. This is being driven by the rapid rise of online video and social media advertising, each of which is growing at about 30% per year. Continued innovation among the search engines – including richer product information and images within ads – is seeing a healthy rise in paid search. We predict paid search to grow by 13% a year to 2015. Much of the growth in internet advertising is at the expense of print – we predict internet advertising will increase its share of the ad market from 18% in 2012 to 23.4% in 2015, while newspapers and magazines will continue to shrink at an average of 1% – 2% a year. We are forecasting that by 2015 online adspend will overtake print.
Rising markets continue to surge ahead
When we look at growth by country, it is the Rising Markets that are outperforming the rest of the world. ZenithOptimedia predicts that Rising Markets will contribute 63% of growth between 2012 and 2015 and will increase their share of global adspend from 34% to 38%.
The high growth markets are in Latin America, Fast-track Asia**, Eastern Europe and Central Asia, which are well ahead of the rest of the world, with an average of between 10% and 11% growth a year expected between 2012 and 2015. Despite this rapid growth, the US is still the biggest contributor of new ad dollars to the global market. Between 2012 and 2015, we expect the US to contribute 28% of the US$76bn that will be added to global adspend.
Changes in the global top 10 ranking
We predict that there will be some change among the top 10 advertising markets between 2012 and 2015. USA, Japan, China and Germany will remain in first to fourth positions, and Australia and South Korea will still stay in eighth and tenth positions, respectively. However, we forecast that the UK will fall from fifth to sixth position, France for seventh to ninth and Canada will fall out of the top ten altogether. Brazil is set to rise to fifth position and Russia will move from eleventh to seventh.
Strengthening economy will boost global ad spend
Our 3.9% forecast for ad expenditure growth this year is down slightly from the 4.1% we forecast in December, mainly because 2012 turned out better than we expected, leaving tougher comparatives for 2013. In dollar terms, our forecast for 2013 is marginally ahead of last forecast, by US$430 million.
The consensus among economic forecasters is that the global economy will gradually build up speed over the next three years. The eurozone should start to pull out of recession towards the end of this year, which will help stimulate world trade. We expect the global ad market to strengthen in step with the economy, although ad expenditure growth will remain behind GDP growth for the rest of our forecast period. Our forecasts for 2014 and 2015 are unchanged at 5.0% and 5.6% respectively.
“As the global economy strengthens, more opportunities will open up for companies to expand their businesses,” says Steve King, Global Chief Executive Officer for ZenithOptimedia Group. “Advertising is an essential tool for launching new products and entering new markets, and advertisers will increase their budgets wherever they can increase the return on their investment.”
* Here we define Mature Markets as North America, Western Europe and Japan, and Rising Markets as everywhere else
** Fast-track Asia includes: China, India, Indonesia, Malaysia, Pakistan, Philippines, Taiwan, Thailand
For further information, please contact:
Jonathan Barnard Tim Collison
Head of Forecasting Global Communications Director
Tel: +44 20 7961 1192 Tel: +44 20 7961 1126
ZenithOptimedia – www.zenithoptimedia.com – is a leading global media services network with 250 offices in 74 countries. We are part of Publicis Groupe, the world’s third largest communications group, and the world’s second largest media counsel and buying group. As the first agency to apply a rigorous and objective approach to improving the effectiveness of marketing spend, ZenithOptimedia delivers to clients the best possible return on their communications investment. This philosophy is supported by a unique approach to strategy development and implementation across the full spectrum of paid, owned and earned contact points – the Live ROI planning process. The ZenithOptimedia Group of companies equips our clients with a full range of integrated skills across communications planning, value optimisation, performance media and content creation. Our key clients include Armani Group, ASUS, Aviva, BBC Worldwide, British Airways, Electrolux, General Mills, Lactalis, LVMH, Nestlé, News Corporation, L’Oréal, Oracle, Puma, Qantas, Reckitt Benckiser, Richemont Group, Royal Bank of Scotland, Sanofi, Telefónica O2, Toyota/Lexus, Verizon and Whirlpool.
About ZenithOptimedia’s forecasts
ZenithOptimedia’s Advertising Expenditure Forecasts report contains forecasts of advertising expenditure by medium for 79 countries. It has been published continually since 1987, and is used by agencies, media owners, banks, analysts, consultants, academics and governments around the world.
Advertising Expenditure Forecasts is published quarterly priced £435. It may be ordered in hard or soft copy from www.zenithoptimedia.com.