Zenith Lowers Global Ad Forecast

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LONDON: The economic problems plaguing a number of Latin American markets have led Zenith to lower its forecast for global ad expenditure, which it now projects will rise by 4.1 percent this year as compared with the 4.6 percent gain predicted in March.

Global ad expenditures are expected to reach $537 billion today. Zenith said the downward revision was a result of recession and currency devaluation in Latin American territories, including Argentina, Brazil, Ecuador and Venezuela, which account for more than half of the region’s ad spend. Latin American advertising expenditure is expected to drop by 2.4 percent this year, compared with a 6.3 percent hike last year. “Argentina’s devaluation alone is responsible for most of the decline in our global forecast for this year,” Zenith said in its newly released Advertising Expenditure Forecasts. Zenith also mentions a threat posed to European growth by a Brexit.

The key finding from Zenith’s ad forecasts is that mobile internet advertising is becoming increasingly dominant, with the medium expected to surpass desktop internet advertising in 2017. Advertisers will spend $99.3 billion on mobile internet advertising in 2017, ahead of the $97.4 billion spent on desktop internet advertising. Zenith previously predicted that mobile would top desktop in 2018. While mobile has a growth rate of 46 percent this year and 29 percent in 2017 and 2018, desktop is expected to be essentially flat for this year and next before falling by more than 6 percent in 2018.

In China, mobile will surpass television as the leading ad medium this year with a 29 percent share, rising to 47 percent in 2018. In 2017, China will top the U.S. as the world’s largest mobile internet advertising market. Mobile is also growing quickly in the U.K., accounting for 28 percent of ad spend this year and 39 percent in 2018. Globally, however, mobile will lag behind television for the next few years.

Zenith also projects strong gains for online video and social media advertising, rising at growth rates of 20.1 percent and 23.6 percent, respectively, between 2015 and 2018.

“China’s advertisers are leading the way in adapting to the rise of mobile technology,” said Jonathan Barnard, head of forecasting at Zenith. “In China, mobile advertising is already the most important medium, and brand communications are mobile first. It’s only a matter of time before the rest of the world catches up.”