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Global adspend online to overtake print by 2015: ZenithOptimedia

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NEW DELHI: Global advertising expenditure will grow by 3.9 per cent in 2013, reaching $518 billion by the end of the year.

ZenithOptimedia has said this forecast for ad expenditure growth this year is down slightly from the 4.1 per cent 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 $430 million.

ZenithOptimedia has included India among the fast-track Asian countries, which also include China, Indonesia, Malaysia, Pakistan, Philippines, Taiwan, Thailand and Vietnam

As has been the case since the start of the economic downturn in 2007, this growth will be led by rising markets, which will grow by 8.2 per cent on average in 2013, while the mature markets grow by just 1.8 per cent, weighed down by the Eurozone crisis. Over the next two years, growth will pick up in both rising and mature markets, reaching 9.4 per cent and 3.5 per cent respectively in 2015.

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. It is forecast that internet advertising will grow by 14.4 per cent in 2013, while traditional media will grow by 1.6 per cent.

Display is the fastest growing medium within internet advertising, with annual growth of 20 per cent. This is being driven by the rapid rise of online video and social media advertising, each of which is growing at about 30 per cent per year. Continued innovation among the search engines – including richer product information and images within ads – is seeing a healthy rise in paid search. Paid search will grow by 13 per cent a year to 2015. Much of the growth in internet advertising is at the expense of print – internet advertising will increase its share of the ad market from 18 per cent in 2012 to 23.4 per cent in 2015, while newspapers and magazines will continue to shrink at an average of one per cent – two per cent a year. By 2015 online adspend will overtake print.

Rising markets are outperforming the rest of the world. ZenithOptimedia predicts that rising markets will contribute 63 per cent of growth between 2012 and 2015 and will increase their share of global adspend from 34 per cent to 38 per cent.

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 per cent and 11 per cent 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, and the US is expected to contribute 28 per cent of the $76 billion that will be added to global adspend.

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, 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.

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. The global ad market will strengthen in step with the economy, although ad expenditure growth will remain behind GDP growth for the rest of our forecast period. The forecasts for 2014 and 2015 are unchanged at five per cent and 5.6 per cent respectively.

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