ZenithOptimedia: Mature Markets to Lead Adspend Growth

September 14, 2015 World Screen
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LONDON: ZenithOptimedia is forecasting that global adspend will grow 4 percent to reach $554 billion in 2015, with mature markets set to lead the growth for the first time in nine years.

ZenithOptimedia is predicting that global adspend will accelerate to 5 percent growth in 2016, boosted by the 2016 Summer Olympics in Rio and the U.S. Presidential elections. Adspend will then slow down slightly in the absence of these events, growing 4.4 percent in 2017.

The firm has reduced its forecasts for adspend growth in 2015 since its June forecast by 0.2 percentage points. There has been broad‐based deceleration across the world as marketers have moderated their expectations of global economic growth. With Brazil and Russia in recession, and China slowing down, the world can no longer rely on emerging markets to set the pace of growth. Therefore, ZenithOptimedia expects ‘mature markets’ (defined as North America, Western Europe and Japan) to contribute more to global adspend growth this year than ‘rising markets’ (everywhere else), for the first time since 2006. Though this is expected to be temporary: rising markets will become the leading contributors to ad market growth again in 2016, and will increase their market share from 37.4 percent in 2015 to 38.8 percent in 2017.

Television is still, by some distance, the dominant advertising medium, attracting 39 percent of spend in 2014. ZenithOptimedia forecasts television adspend to grow by an average of 2 percent a year through to 2017. Despite this growth, television’s share of global adspend is likely to fall back over the next few years, as desktop and mobile internet grow much faster. Television’s market share has grown steadily over the last three and a half decades, from 29.6 percent of spend in 1980 to 39.6 percent in 2012. The firm, however, believes the medium has now peaked; it estimates that television’s share slipped slightly to 39.5 percent in 2013 and 38.8 percent in 2014, and forecast it to fall further to 35.9 percent in 2017. Marketers are also beginning to move budgets away from television to online video, which ZenithOptimedia expects to grow from 2.5 percent of global adspend in 2014 to 4.2 percent in 2017. The audiovisual share of the market will therefore fall by 1.2 percentage points, from 41.3 percent in 2014 to 40.1 percent in 2017.