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$99 bn spent on internet ads globally in 2012: GroupM

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MUMBAI: Global internet advertising at $99 billion has amounted to 19.5 per cent of the total ad investment for 2012, according to GroupM‘s This Year, Next Year: Interaction 2013 report. This justifies GroupM‘s prediction in last year’s report that said internet ad spends that year will surpass $98 billion.

Global internet advertising, according to GroupM, posted a 16.2 per cent growth over the year-ago period.

Geographically speaking, North America led the list with internet spends to the tune of $38.3 billion (38.69 per cent of global internet ad spends) followed by the Asia Pacific region at $30.6 billion (30.91 per cent) and Western Europe in third place with spends of $ 24.1 billion (24.34 per cent).

In 2011, the spends on internet advertising stood at $84.8 billion. Back then, it made up 17 per cent of the total global advertising investment. In 2011 too, North America led the pack in terms of overall digital ad spending with an estimated $34.5 billion; Asia-Pacific came in second with $24.8 billion followed by Western Europe with $21 billion.

The study is part of GroupM‘s media and marketing forecasting series drawn from data supplied by parent company WPP‘s worldwide resources in advertising, public relations, market research, and specialist communications. The study has expanded its scope since last year, adding six new countries to its research bringing the total to 26 countries.

The study predicts that in 2013 digital advertising spending will reach $113.5 billion globally, a spike of 14.6 per cent from 2012. This is estimated to be 21 per cent of all measured advertising investment in the year. North America will continue to be the region with the highest internet ad spends with an estimated $42.8 billion; Asia-Pacific is predicted to follow with $36.8 billion and Western Europe is estimated to see ad spends in the range of $26.6 billion.

In the U.S., digital ad spends reached $35.4 billion in 2012, a 23 per cent share of the overall domestic market and a 10 per cent increase over the previous year, according to the study. This year those figures are expected to reach $39.7 billion for a 25.4 per cent share and a 12 per cent increase over 2011.

GroupM global chief digital officer Rob Norman said, “The internet no longer belongs to the old world and eastern Asia, nor does it depend upon evolution of infrastructure conceived a generation or more ago, but instead reaches every continent and economically active individual. Ken Olsen, founder and CEO of Digital Equipment said in 1977, ‘There is no reason for any individual to have a computer in his home.’ It turns out that he may, inadvertently, have been right. Why have a computer in your home when you can have computing anywhere you like?”

Norman also touched upon the issue of the rise and impact of online video. “Tablets created an entirely new and original mechanism of media consumption in less than three years. Tablets combine the display quality of HDTV, the interactivity of the PC and the location awareness, touch interface and app ecosystem of the mobile phone. Media is being re-imagined for the tablet and is increasingly seen as the future home of what we have always described as the print industry, the decline of which is precipitous with ever-fewer exceptions,” he sated.

According to the report, e-commerce per user will stand at $859 in 2013, a 64 per cent increase since 2007. International e-commerce total adds up to $917 billion for 2012 with a run-rate growth of 18 per cent to a predicted $1.1 trillion in 2013. This volume of e-commerce generates an estimated 40 per cent of online paid-media ad investment today.

The study also reveals that the average percentage of consumers’ “media time” spent online has risen from 21 per cent in 2007 to a predicted 30 per cent in 2013. In 2011, it was 19 per cent.

Additionally, it was also found that investment in print media continued to lose share while digital media investment continued to gain. While print accounted for 14 per cent of the media time spent in a day, it attracted about 24 per cent of investment, down from 48 per cent. The decline of print advertising reflects falling circulations in the old world, but its share of the world‘s media day has been surprisingly stable, and even increased in 2011, thanks to China.

% shares of the media day (26 countries)
 
2007
2008
2009
2010
2011
2012
2013f
Online
21
22
25
26
27
29
30
TV
42
42
42
41
39
38
38
Print
15
16
15
14
16
14
14
Radio
16
19
19
18
18
18
18
Total
100
100
100
100
100
100
100

These figures thrown up by the GroupM report substantiate the media communications conglomerate‘s confidence in the medium. The year 2012 saw media communications networks focus on digital capabilities with the big guns going on a shopping spree around the world.

UK-based WPP, led by media honcho Sir Martin Sorrell, made as many as 18 digital buys across the globe with America’s AKQA being the crowning jewel in its acquisition trophy. The company made some strategic investments in the Indian subcontinent as well with the acquisition of Indian digital services agency Hungama Digital and Pakistani digital agency Converge Technologies.

France based Publicis Groupe was also aggressive in its digital aspirations and made 13 acquisitions in the digital ad agency space, three of which were in India. Other media agency networks like Havas Media, Dentsu and the Interpblic Group have also taken the acquisition route to strengthen their digital capacities. Havas underwent a restructuring that made way for an exclusive Digital Umbrella in order to better integrate its digital arm with its creative and media businesses.

The advertisers too seemed to be gung-ho about the medium with almost every major brand making sure it gets its share of limelight in the digital space. Brands like Nike, Coca-Cola, Mercedes and McDonald‘s made use of tools like YouTube, Facebook and Twitter apart from display ads to influence and engage the audiences.

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