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Digital display ads drive global adspend

News, 11 September 2017
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GLOBAL: Global advertising expenditure is forecast to grow 4% to $558bn by the end of 2017, driven by digital display formats, in particular social media in-feed ads and online video.

According to the latest Advertising Expenditure Forecasts report from media agency Zenith, these and other digital formats will drive 14% annual growth in total display advertising between 2016 and 2019.

Social media is set to grow at 20% a year and online video at 21% a year. Social media is central to the lives of many users, Zenith noted, and brands can use it to communicate with them effectively, while online video is better at conveying brand values than traditional display formats like banners.

In fact, it added, these are no longer mutually exclusive categories. “Internet display is coming into its own as a brand-building media, powered by social media and online video,” said Jonathan Barnard, Head of Forecasting and Director of Global Intelligence at Zenith.

“But the distinctions between online video and traditional television are being eroded,” he added, “and the two work together much better than they do separately.”

Essentially, television supplies reach, while online video offers targeting and personalisation; together they accounted for 48.5% of expenditure on brand advertising in 2016, up from 43.7% in 2010, and Zenith forecast their market share to rise to 49.3% in 2019.

In total, display expenditure is predicted to grow from $84bn to $126bn over 2016-19 and to account for 64% of all the growth in global ad expenditure.

By 2019, said Zenith, total display will account for 50.4% of internet advertising expenditure, exceeding 50% for the first time.

The UK, however, is unusual in that digital display takes a far lower share of the online market – just 37% in 2019, Zenith forecast. This figure aligns with the latest AA/WARC Expenditure Report forecast, published in July. Zenith attributed the trend to UK advertisers directing spending towards classified and search rather than display since UK consumers are very heavy users of e-commerce.

It also cut its UK expenditure growth forecast for 2017 from 0.9% to 0.7%, citing a slowing economy, gathering inflation, and political uncertainty.

Global paid search and classified expenditure, meanwhile, are still growing but are lagging behind; paid search is expected to grow at 10% a year, reaching $103bn by 2019, while classified spending will increase by 7% a year to $21bn.

Much of the recent growth in paid search has come from innovations in mobile and location-based search, Zenith noted, adding that future growth will come from adapting search ads to voice-activated personal assistants like Siri and Alexa.

Data sourced from Zenith; additional content by WARC staff

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