TV to Maintain Global Ad Spend Dominance as Online Cannibalizes Other Media

October 1, 2012

TV will keep its leading share of global advertising spend this year and through 2014, although online ad spend will grow at the expense of other major media forms, says ZenithOptimedia in its latest forecast, released in October. This year, on the back of the European football championship, the Summer Olympics, and the US elections, the forecasters expect TV’s share of global ad expenditures to reach 40.4% (US $200.5 billion), a new peak. TV won’t make a sudden fall, either – predicted to maintain that share of spend in 2013, before only inching down slightly in 2014, to 40.3%.

TV advertising remains strong in the US also, growing faster than overall advertising spend. A more detailed look at US TV advertising spending patterns and the influence of TV ads can be found here.

Online Ad Spend Taking Dollars Away From Print

While TV may be eating up the biggest slice of the pie, it’s online ad spending that’s growing the quickest. ZenithOptimedia projects that online ad spend will reach 17.8% of total global ad expenditures this year, up from 14.7% just 2 years ago. Fast forward to 2014, and that share is expected to be 21.4%, larger than any form of traditional media save for TV. [Tweet this]

The big losers in this picture? Print media. Newspapers, which held an estimated 20.2% share of global ad spending last year, should fall to 18.9% this year before continuing the downward trend to 17.9% in 2013 and 16.8% in 2014. That means that next year, the internet is expected to command a higher share of global ad spend than newspapers. [Tweet this]

Magazines will also suffer, falling from 9.4% share last year to a predicted 8.8% this year, 8.3% in 2013, and 7.9% in 2014. While radio (7.1% last year; 7% this year; and 6.7% in 2014) and outdoor (6.6% last year; 6.5% this year; and 6.3% in 2014) will also see declining share at the hands of online’s growth, those decreases are relatively muted when compared to print.

Display Ad Spend to Grow Faster Than Search

Looking further into the online space, ZenithOptimedia finds display to be the fastest-growing category, with its 20% annual growth primarily attributable to the growth of social media and online video advertising. Paid search and classifieds will also see growth of 14% and 6%, respectively. As a result of display’s more rapid growth, it is projected to account for 40% share of internet ad spend in 2014, up from last year’s 36%.

A MarketingCharts analysis of IAB figures reveals a different trend within the US. That analysis, of spending trends from 2000-2011, found that paid search has grown more quickly in the US than display advertising.

US Growth Matches Global Average

When it comes to total ad expenditures on a global basis, the forecast is relatively bright, at 3.8% growth this year, though that represents a downgrade from June’s 4.3% forecast. The downgrade is a result of an expected reduction in Eurozone spend of 3.1% this year, a larger drop than the 1.1% decline from the June forecast. The US is expected to match the global average of 4.3% growth.

A recent report from Nielsen found slower growth in Q2, with global ad spend up 2.4% year-over-year, a rate also matched by the US. That report limits its analysis of online ad spend to display advertising.

Despite ZenithOptimedia’s downgrade for this year, the company predicts stronger growth next year, of 4.3%.

Other Findings:

  • The US is expected to account for 29% of the US$69 billion in new global ad spending between 2011 and 2014, or $19.8 billion.
  • Developing markets will contribute 59% of ad spend growth, led by China ($11.6 billion), Brazil ($5.4 billion), and Russia ($4 billion).
  • The US remains the largest ad market, with spending of $154.1 billion, ahead of Japan ($49.9 billion) and China ($32.3 billion).

About the Data: All ZenithOptimedia figures were calculated using currency conversions at 2011 average rates.

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