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Internet adspend to overtake TV

News, 23 July 2015

LONDON: The internet is expected to overtake TV to become the largest medium for advertising in 2016, according to the latest International Ad Forecast from Warc.

As well as downgrading its global adspend forecast for 2015 by 2.5pp to 2.3% growth, Warc examined the rise and fall of various marketing channels in the 12 major markets covered in its report. The 12 markets studied comprise some 75% of all advertising expenditure tracked by Warc.

Across all key markets, internet adspend is expected to register rapid growth, rising 15.6% to $135.9bn in 2015 and 12.7% to $153.1bn in 2016.

At the same time, adspend on TV is expected to fall 0.9% to $144.9bn this year before rebounding with 3.1% growth in 2016. By then, TV adspend across the 12 markets will be worth $149.4bn, or $3.7bn less than adspend devoted to the internet.

The internet is already the largest ad platform in six of the 12 major markets and they include Australia (as of 2014), Canada (2014), China (2014), France (2014), Germany (2013) and the UK (2011).

In addition to becoming the first major market where internet advertising leads, further data show the UK spent the most per head on internet advertising in 2014.

UK per capita internet adspend amounted to $187 (£114) last year and it is forecast to carry on growing to reach $233 (£142) in 2016.

Looking at four other major markets, per capita internet adspend in Australia is forecast to grow to $225 in 2016, followed by the US ($202), Canada ($118) and Germany ($97).

Even on the basis of purchasing power parity (PPP), when exchange rate fluctuations are removed, the UK still leads and is followed by the US and then Australia.

For other media in 2016, Warc forecasts rises in PPP adspend for cinema (+3.3%) and outdoor (+2.4%). However, adspend on newspapers (-5.8%), magazines (-7.4%) and radio (-0.1%) is expected to fall next year.

Commenting on the report, Warc data analyst James McDonald said: "Internet adspend has grown at a phenomenal rate since the dot-com bubble burst, and more recently an influx of spending on mobile ads has boosted this growth further.

"While television will continue to draw a vast amount of ad revenue over the coming years, the added tailoring and targeting offered by internet ads will prove ever more attractive to marketers, particularly as these features become more refined."

A free sample of Warc's International Ad Forecast can be downloaded here.

Data sourced from Warc