Warc Blog

Mobile drives global adspend growth

10 December 2013
NEW YORK: A rush of new advertising forecasts reveals mixed views on the industry's prospects for 2014, but mobile is expected to be a clear winner.

GroupM, owned by WPP, downgraded its forecast of overall spending growth from 5.1% to 4.6%, representing a total of $531bn. It blamed this on economic gridlock in the US and a persistent financial crisis in the eurozone.

But two other groups upped their predictions. ZenithOptimedia, owned by Publicis, put annual growth next year at 5.3% and pointed to the positive effects of events such as the Winter Olympics, the FIFA World Cup and US mid-term elections. And Magna Global, part of Interpublic, revised its forecast up to 6.5% and a total of $521bn.

Digital media was a significant growth area. GroupM saw its share of the total rising from 19% this year to 21% in 2014

ZenithOptimedia also expected internet advertising would be the fastest growing channel, increasing its share from 20.6% this year to 26.6% by 2016. And within that, mobile would lead the way, expanding at an average rate of 50% a year over the same period.

Mobile ads currently account for 2.7% of total global ad spend but their share is likely to almost treble, to 7.7%, by 2016, by which time it will have overtaken traditional media such as radio, magazines and outdoor ads.

"Mobile technology is creating new opportunities for marketers to connect with consumers," Steve King, chief executive of Zenith, told Reuters. "Combined with the continued rise of young, dynamic markets, this will spur healthy and sustained growth in global adspend over the next three years."

Zenith anticipated that mobile would contribute over one third (36%) of extra ad spending over this period. It added that this was "the first time in the past 20 years that a new platform is expanding overall media consumption without cannibalizing any of the other media platforms".

So television continues to dominate advertising expenditure, but the Financial Times noted that its hold on budgets was "beginning to falter", as both GroupM and ZenithOptimedia predicted that its share would decrease. The latter said that TV's current share of 40.2% of the global ad market would decline to 39.3% by 2016.

At the same time, however, the company was projecting that television would account for 34% of all new ad spending, just behind mobile. Jonathan Barnard, ZenithOptimedia's head of forecasting, said that digital and online video were now the real challengers to TV. "There will be quite a lot of disruption to come over the next 10 years," he added.

Data sourced from Reuters, Financial Times; additional content by Warc staff

 
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