Asia Pacific is said to become the biggest contributor to global adspend growth, accounting for 33.8% of global adspend in 2020, up from 32.6% in 2017, this is according to Zenith's "Advertising Expenditure Forecasts" for June 2018.
Zenith's report added that the region will also contribute US$32.1 billion (43%) out of the US$75.1 billion of all new ad dollars between 2017 and 2020. Six of the 10 markets that will contribute the most to global growth in Asia Pacific are China (22%), India (5%), Indonesia (4%), Japan (3%), the Philippines (3%) and South Korea (2%).
Fast-track Asia, comprised by rapidly growing economies including Malaysia, Indonesia, Philippines and China, is expected to see a 7.5% increase in average annual growth in adspend between 2017 to 2020. The adspend in Advanced Asia, which comprises Singapore, Hong Kong, South Korea, Australia and New Zealand, is predicted to see a 3.4% increase in average annual growth during the same period.
On the other hand, North America is falling behind in growth, and is expected to contribute 27% of new ad dollars between 2017 and 2020, while its share of global adspend slips from 37.1% to 36.0%. The global advertising expenditure is forecasted to grow 4.5% this year, 4.2% in 2019 and 4.3% in 2020.
Mobile advertising to "comfortably overtake" TV in 2021
Meanwhile, mobile advertising will account for 30.5% of global advertising expenditure in 2020, amounting to US$187 billion. This is a 19.2% increase from 2017 and is more than twice the US$88 billion spent on desktop advertising.
Although mobile advertising is currently US$5 billion behind the US$192 billion spent on TV advertising, it is expected to "comfortably overtake" TV in 2021, growing at an average rate of 21% a year to 2020. Online advertising is expected to make the same switch from desktop to mobile, as more internet users transition to the mobile device and new users engage only on the mobile platforms.
However, shifting budgets to mobile advertising might affect the brands' ability to win new customers and expand their market share. According to Zenith’s Touchpoints ROI Tracker research, traditional mass media are more effective at driving recall among new or light buyers. Therefore, having a strong understanding of acquisition channels and retention channels is key.
TV ads are deemed most effective at driving recall among potential consumers, with 53% of potential customers as likely to recall TV ads as existing consumers. In the meantime, mobile ads are least effective, with only 41% of potential consumers being likely to recall them. While targeted mobile ads can improve top of mind recall and help brands achieve short-term performance targets, Zenith said it is currently "less effective" at creating long-term awareness among potential customers than traditional media. As such, brands with a heavy mobile presence should consider investing more in traditional mass media to compensate for the loss.
Zenith's report also listed display - traditional display, online video and social media - as the fastest-growing internet subcategory, with an annual growth forecast of 13% to 2020. All three types of display have benefited from the transition to programmatic buying, which allows agencies to target audiences more efficiently and more effectively, with personalised creative.
Online video and social media are currently the driving forces of internet adspend growth and are predicted to grow at average rates of 18% and 16% a year respectively between 2017 and 2020. Online video is benefiting from the increasing availability of high-quality content, and improvements to the mobile viewing experience, such as better displays and faster connections. Paid search and classified are now both lagging substantially behind display, with search growing at 8% a year and classified at 6%.
Traditional media still going strong
Despite the rise in mobile advertising, traditional media is still growing, albeit at "very low rates". Zenith forecasts TV and radio to grow by 1% a year between 2017 and 2020, while out-of-home advertising will grow by 3% a year. On the other hand, cinema is predicted to grow by 16% a year, due to investment in new screens, successful movie franchises and better international marketing. China will be the main driver of this trend, as it saw ticket sales increase by 22% in 2017, overtaking the US to become the world's biggest cinema advertising market in 2017. Currently worth US$1.2 billion, China's cinema advertising market is expected to reach US$2.8 billion by 2020.
Meanwhile, print advertising and circulation will continue to shrink, with newspaper adspend decreasing by 5% on average each year between 2017 and 2020, while magazine adspend will drop by 6%. This is only applicable to advertising within print titles, as publishers' online revenues are counted within the desktop and mobile internet totals.
According to Jonathan Barnard, Zenith’s head of forecasting and director of global intelligence, dynamic markets in Asia Pacific are leading the way in global adspend growth, growing at 5% to 6% a year. Asia Pacific is expected to be the "biggest advertising region" in the world, by the middle of the next decade, Barnard said.
“The mobile device in our pockets is becoming the gateway to our media world, but its brand-building capabilities are still in question – simply applying old practices to new technology may not translate to brand growth. Having a clear understanding of how the entire ecosystem of paid, owned and earned media works together to drive return on investment is vital," Vittorio Bonori, Zenith’s global brand president, said.
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