Online ad spending around the world is projected to grow by 13.4% to reach $113.6 billion this year, according to a revised forecast issued by MAGNA GLOBAL that takes a more bullish view of online spending this year than its previous forecast. Another new forecast, from ZenithOptimedia, projects a 15% annual increase in online spending between this year and 2015. Both groups see strong growth for social and mobile advertising around the world. Search will remain the dominant driver of online ad revenues, according to MAGNA GLOBAL, and is expected to grow by 14.6% to $52 billion. But mobile and social formats will grow most quickly, by 54% (to $12 billion) and 39.6% (to $8.2 billion), respectively. Also seeing rapid growth will be online video, projected to increase by 21% to $6.6 billion.
Display is slated to see slower – if any – growth, with a decline in some markets owing to the “commoditization and deflation of display inventory.”
The ZenithOptimedia forecast concurs with respect to the growth of mobile, social, and video. Mobile advertising is projected to increase by 67% this year and at an average rate of 51% between 2012 and 2015, while social and video are estimated to be growing at about 30% a year. Because ZenithOptimedia packages those latter formats into overall display projections, it’s forecasting a 20% annual increase in display advertising revenues. The forecast for search – at 14% growth – is much the same as MAGNA GLOBAL’s.
Google Grabs Half of Mobile Ad Revenues
MAGNA GLOBAL and ZenithOptimedia aren’t the only outfits projecting strong growth for mobile advertising. In a recent forecast, eMarketer forecast almost 80% growth in total mobile internet ad revenues this year. According to eMarketer’s estimates, Google is the clear winner in the mobile advertising world, taking home an estimated 52.4% of total mobile revenues around the world last year, and a projected 56% this year.
For what it’s worth, eMarketer’s forecast for internet advertising growth this year stands at 12.3%, a slower rate than expected by MAGNA GLOBAL and ZenithOptimedia.
What About Other Media?
TV – which remains the leading advertising medium at 40% share of dollars – will slow down from last year’s growth rates, and is expected to register only 2% growth, to $196.5 billion, per the MAGNA GLOBAL forecast. That’s after a 5% increase last year, and is due to the absence of large events such as the Olympics. Other traditional media will have mixed results: newspaper revenues will fall by 3.3%; magazine revenues will decline by 5.1%; radio spending will increase by 1%; and out-of-home revenues will grow by 2.9%.
Despite the continuing declines facing print, magazine and newspaper spending combined are expected to capture 23% market share. That’s slightly less than digital’s 23.3% share.
Details on global newspaper advertising and circulation trends in 2012 can be found here.
ZenithOptimedia sees fairly similar trends on the horizon. Between 2012 and 2015, the share of total global ad spend held by each medium is projected to change as follows:
TV will drop slightly from 40.1% share last year to 39.5% in 2015;
Internet will grow from 18.3% share to 24.3% share;
Newspapers will drop from 18.7% share to 15.1% share;
Magazines will decline from 8.6% share to 6.9% share;
Radio will also fall, from 7% share to 6.6% share;
Outdoor will inch up from 6.8% to 6.9% share; and
Cinema will also edge up a by 0.1% point to 0.6%.
Overall, according to MAGNA GLOBAL, ad spending is forecast to increase by 3% this year to $486 billion before ramping up to a 6.1% increase next year, reaching $515 billion. ZenithOptimedia sees a 3.5% increase this year followed by a 5.1% jump next year.
Advertising spending will only inch up in North America (0.7%) and the Europe, Middle East and Africa (0.4%) region, but grow more quickly in the Asia-Pacific (5.9%) and Latin America (12.5%), per MAGNA Global. ZenithOptimedia sees fast growth in Eastern Europe and Central Asia (9.6%) and has a more bearish forecast for Latin America (9.5%).
Ad revenues in Western Europe are expected by MAGNA GLOBAL to fall by 1.6% this year; ZenithOptimedia projects the peripheral Eurozone’s decline to be 2.7%.
The US is projected to post a 0.4% growth rate in ad revenues, to $155 billion, according to MAGNA GLOBAL. That growth rate is not normalized, however, and when neutraling political and Olympic spending, the increase is at 1.5%.
MAGNA GLOBAL also projects US mobile ad spending to increase by 61.7%. Recent figures from the IAB and PwC peg 2012 growth in mobile ad revenues at 111%.
Within the US, online ad spend will grow by 11.5%, while magazines (-6.7%) and newspapers (-6.8%) will see similar declines and TV revenues will fall by 2.8%. Radio (flat) and out-of-home (+3.5%) will fare better than other traditional media. A detailed traditional media outlook between 2013 and 2017 can be found here.
About the Data: MAGNA GLOBAL describes its methodology as follows:
“MAGNA GLOBAL forecasts media owners’ advertising revenues in the US and around the world through financial analyses of media companies’ public filings, government reports, trade association data and local market expertise. MAGNA GLOBAL’s new methodology was introduced to the industry in 2009 and has redefined measurement for the advertising-supported media economy, delivering unparalleled authority and accuracy. Our Global Media Suppliers Advertising Revenue Forecasts include television (pay and free), internet (search, display, video, mobile), newspapers, magazines, radio, cinema and out-of-home (traditional and digital). Our report monitors media suppliers’ revenues in 73 markets, including all major countries, representing 95% of the world’s economy. Three new markets have been added in the June 2013 report: Sri-Lanka, Pakistan and Kenya. Our forecasts are updated twice a year and available to our subscribers. Our US Advertising Revenue Forecast study includes detailed data for more than 40 categories of media on a quarterly basis from 1990 to 2012 and on an annual basis from 1980 to 2017, updated quarterly.”