Most businesses around the world will spend more on internet advertising than on TV commercials by 2017, a year earlier than previously predicted, according to a new report.
The study, from ZenithOptimedia forecasts that global ad spend is heading for 4.6% growth this year, up from 3.9% growth last year.
Global advertising expenditure will total $579bn this year, and will exceed $600bn in 2017, reaching $603bn by the end of the year – all despite uncertainty and challenges in the global economy.
Mobile ad spend up 128%
Internet advertising remains the main driver of global adspend growth, the report says, and will grow at more than three times the global average this year, by 15.7%. This growth is slower than in 2014, when it was 21.1%, due to the market maturing.
The report said the great majority of new internet advertising is targeted at mobile devices, with mobile ad expenditure increasing by $64 billion between 2015 and 2018, a growth rate of 128%.
This accounts for 92% of new advertising spend added to the global market over this period.
Slowdown in China, recession in Brazil and Russia, uncertainty over the EU and the ongoing migration crisis have not shaken advertisers with the forecasts hardly changing since the last was published in December 2015.
UK a ‘stand out market’
Zenith states that it is remaining optimistic due to rapid recovery from the markets most affected by the eurozone crisis, and the emergence of rapidly growing markets that are now opening up to international advertising.
The UK was cited as the standout ad market in Europe. ZenithOptimedia said the UK was “currently booming thanks to the rapid adoption of internet advertising” and predicted UK ad spend will grow by 9.2% this year, compared to 4.1% in the Western and Central Europe region.
Its forecast for the UK is down from a previous forecast in December, which predicted 9.7 per cent growth.
“Rapid growth from countries that are relatively new to the international advertising market, combined with a resurgence of established markets that were damaged by the financial crisis, will keep the global ad market on track for healthy growth for at least the next few years,” said Jonathan Barnard, head of forecasting at ZenithOptimedia.
In the short term, ad expenditure is set to be boosted by the US presidential elections, the Summer Olympics and the UEFA football championship in Europe.
Zenith expects these events to add a net $6.1bn to the global ad market in 2016 – $3.2bn from the elections, $2.0bn from the Olympics and $0.9bn from the football.
In the medium term, most of the European ad markets that suffered the deepest cuts from the financial crisis and its aftermath are now “enjoying sustained recovery” and will “expand rapidly” over the next few years, Zenith said.
Jonathan Barnard, the head of forecasting at ZenithOptimedia, said: “Rapid growth from countries that are relatively new to the international advertising market, combined with a resurgence of established markets that were damaged by the financial crisis, will keep the global ad market on track for healthy growth for at least the next few years.”