Internet advertising to takeover television by 2018: forecasts ZenithOptimedia

MUMBAI: India, Indonesia and Philippines emerge as hot spots of ad spend growth as per ZenithOptimedia’s Advertising Expenditure Forecast of December 2015. These are the only three markets in which adspend is growing at double-digit annual rates . Between 2015 and 2018 the report estimates Philippines to expand by USD 1.2 billion dollars at growth rate of 13% a year, while’s India’s ad spends will increase to USD 3 billion also at 13% a year.

Indonesia is expected to show the biggest growth at 17 % a year, touching USD 4.1 billion.

Calling it Fast Track Asia bloc comprising of China, India, Indonesia, Malaysia, Pakistan, Philippines, Taiwan, Thailand and Vietnam, the report further mentions that ad expenditure in Fast-track Asia will  grow at 8.9% in 2015, and at an average rate of 8.4% a year between 2015 and 2018, down from 14.7% a year between 2009 and 2014.

Having said that, even with their growth rates slowing down China will continue to be one of the biggest contributor to the global ad spends which is estimated to reach USD 579 billion at a growth rate of 4.7 % by 2016. Between 2015 and 2018, China is expected to contribute 24 percent of the global  ad expenditure only preceded by the US at 26 percent. The UK comes third, contributing 7%, and Indonesia fourth, contributing 5%. Not to mention, the top five of the ten biggest contributor to the global ad expenditure is expected to come from the Fast Track Asia countries, by 2018. Overall, rising markets will contribute 54% of additional ad expenditure between 2015 and 2018, and to increase their share of the global market from 37% to 39%.

“Growth of the global ad market is being driven by advances in technology, especially mobile and programmatic tech,” said Steve King, ZenithOptimedia Worldwide CEO Steve King. “But television remains by far the most important channel for brand communication, and online video, its digital offshoot, is increasing the audiovisual share of global display advertising.”

The report also singles out internet to become the most preferred medium of advertising with internet advertising command 36.6 per cent of global advertising, overtaking the current largest advertising medium, television by 2018. Looking at the ad market as a whole, television’s share peaked at 39.7% in 2012, and is estimated at 37.7% in 2015, before falling back to 34.8% by 2018.

The report highlights paid search as one of the key reasons for televisions loss of adspend share. Paid search is essentially a direct response channel (together with classified), while television is the pre-eminent brand awareness channel which is expected  to remain so for many years to come.  Television offers unparalleled capacity to build reach, while online video offers pinpoint targeting and the potential for personalisation of marketing messages. Both are powerful tools for establishing brand awareness and associations. As per the report, television will account for 44.7% of display expenditure  in 2015, and 42.9% in 2018.

Within internet advertising, mobile advertising will emerge as the leading platform with it overtaking desktop and accounting for 50.2% of all internet advertising.

Mobile advertising will total USD 114 billion in 2018, up from USD 50 billion in 2015. Moreover, according to the report, mobile advertising is responsible for almost all of the growth in global adspend. The report forecasts  it to grow at an average rate of 32% a year between 2015 and 2018, and to contribute 87% of all of the new ad money added to the global market during these years.

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