Mobile is to a extend the main driver of global advertising expenditure growth. Mobile advertising is anticipated to be account for 30.5% of global ad spend in 2020, up from 19.2% in 2017, according to Zenith’s Advertising Expenditure Forecasts, published today.
Expenditure on mobile advertising will be US$187 billion in 2020, more than twice the US$88 billion spent on desktop advertising, and just US$5 billion behind the US$192 billion spent on television advertising. At the current rate of growth mobile advertising will easily overtake television in 2021.
Share of global adspend by medium (%)
Since internet users switch from desktop to mobile devices and new users go straight to mobile, online advertising is making the same switch. Advertising on mobile devices is rising at a meteoric rate, and is taking market share from all most other media. Mobile adspend is expected to grow at an average rate of 21% a year to 2020.
However, brands must reassess their customer acquisition when they are shifting budgets to mobile advertising to win new customers and expand their market share. Zenith’s Touchpoints ROI Tracker research shows that traditional mass media are more effective at driving recall among new or light buyers, while mobile ads are least effective. Potential customers are 53% as likely to recall television ads as existing customers, but for mobile ads this falls to 41%. Therefore, having a strong understanding of acquisition channels and retention channels is key.
“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,” said Vittorio Bonori, Zenith’s Global Brand President. “Having a clear understanding of how the entire ecosystem of paid, owned and earned media works together to drive return on investment is vital.”
Targeting mobile ads at existing customers can certainly help brands achieve short-term performance targets, especially because mobile is increasingly tying together the whole consumer journey. However, mobile is currently less effective at creating long-term awareness among potential customers than traditional media, so brands with a heavy mobile presence should consider investing more in traditional mass media to compensate for this.
Most of the traditional medias are growing at very low rates. Television and radio are expected to grow by 1% a year between 2017 and 2020, while out-of-home advertising will grow by 3% a year. Cinema, however, is growing at 16% a year, thanks to investment in new screens, successful movie franchises, and better international marketing. The main driver is surging demand in China, where ticket sales increased 22% in 2017. China overtook the US to become the world’s biggest cinema advertising market in 2017, worth US$1.2billion, and it will reach US$2.8billion by 2020.
Print advertising will continue to shrink together with circulations. Between 2017 and 2020, we forecast newspaper adspend to shrink by an average of 5% a year, while magazine adspend shrinks by 6%.
Global advertising expenditure is forecasted to grow 4.5% this year, 4.2% growth for 2019 and 4.3% growth for 2020, so growth will remain comfortably within the 4%-5% range it has stayed within since 2011.
Growth of advertising expenditure and GDP 2017-2020 (%)
Asia Pacific is by far the biggest contributor to global adspend growth. Between 2017 and 2020 it will contribute 43% of all the new ad dollars added to the market – US$32.1billion out of the US$75.1billion total. Six of the ten markets that will contribute the most to global growth are in Asia Pacific: China (which by itself will account for 22% of global growth), India (which will contribute 5%), Indonesia (4%), Japan (3%), the Philippines (3%) and South Korea (2%). We forecast that Asia Pacific will account for 33.8% of global adspend in 2020, up from 32.6% in 2017.
Top ten contributors to adspend growth 2017-2020 (US$m)
“Dynamic markets in Asia Pacific are leading the way in global adspend growth, growing at 5%-6% a year,” said Jonathan Barnard, Zenith’s Head of Forecasting and Director of Global Intelligence. “By the middle of the next decade it will be the biggest advertising region in the world.”