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Mobile ads to soon leapfrog over traditional media

The adspend in 2014 is set to soar, thanks to mobile advertising.

According to a report by ZenithOptimedia, global ad expenditure will grow by 5.3% reaching US$532 billion by this year end. This is an increase by 0.2% since September following stronger growth from markets such as US, UK, Germany, Hungary, Poland, Australia and Mexico and the bottoming out of Spain’s steep downturn.

In Asia, apart from Japan, five countries with developed economies and advanced ad markets, namely Australia, New Zealand, Hong Kong, Singapore and South Korea, have shown a disappointing 1.3% increase in 2013. This is after a period of heightened tension between North Korea and its neighbours, causing advertisers in South Korea to cancel or postpone several campaigns.

However, going forward, ZenithOptimedia predicts a much healthier 4.5% growth in 2014 followed by 6.6% growth in 2015 and 4.8% growth in 2016.

On the other hand, fast-track Asia comprising markets such as China, India, Indonesia, Malaysia, Pakistan, Philippines, Taiwan, Thailand and Vietnam which barely got affected by the 2009 downturn are comfortably witnessing double-digit growth rates. It is estimated that ad expenditure in these markets has grown by 10.7% in 2013 followed by an expected 10-12% annual growth in 2014 to 2016.

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The jump in adpspend will partly also be driven by the Winter Olympics in Sochi, with spending coming mostly from existing budgets,” GroupM chief investment officer Rino Scanzoni said.

Worldwide, Smith said there is local, specific support for ad spending growth but he added that total global spending remains vulnerable to a wider economic downside.

Mobile’s magic touch

According to ZenithOptemdia, mobile advertising, including all internet ads delivered to smartphones and tablets, whether display, classified or search, is growing seven times faster than desktop internet ads. Mobile advertising is set to grow by an average of 50% a year between 2013 and 2016. This will be primarily driven by the rapid adoption of smartphones and tablets.

Global expenditure on mobile advertising will be at US$13.5billion in 2013, representing 13.1% of internet expenditure and 2.7% of advertising across all media, said the Zenith report. By 2016 this total is forecasted to rise to US$45.4billion, which will be 29.0% of internet expenditure and 7.7% of all expenditure.

With such growth, mobile will soon leapfrog mediums such as radio, magazines and outdoor to become the world’s fourth-largest medium.

ZOMobile_to_Leapfrog

Digital, particularly social media continue to get stronger

Overall the internet is still the fastest growing medium for ads. It is predicted to grow to 15.8% by the end of 2013, with an average a 15% growth from 2014 to 2016. ZenithOptimedia also predicted that display would be the fastest growing sub-category, with 19% annual growth. This is partly due to the rapid rise of social media advertising, which is growing at 28% a year.

The Group M report predicted that investment in digital media would account for 19% of measured ad spending globally this year (US$97 billion) and 21% in 2014, with respective growth rates of 15% and 14%. Smith noted, as in the past reports, most of digital’s share of growth will come at the expense of print media (newspapers and magazines).

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Another report by Magna said the biggest game changer was the rise of social media and, more specifically mobile social media. In the last 18 months, social media usage has migrated towards portable (mobile phones and tablet) devices and platforms at a faster rate than most anticipated.

These portable devices are increasingly used in homes and not just on the move and is also gradually replacing laptops and PC usage indoors.

Even more significantly, social and mobile seem to have found each other in perfect chemistry, said the Magna report. Social media owners (mostly Facebook and Twitter ) have introduced ad formats specifically matched to those portable devices that have met with instant success among marketers without alienating users.

As a result, the share of advertising revenues derived by Facebook from ad insertions on portable devices has increased from 12% in 2012 to a projected 50% in the third quarter of 2013.

Going forward, this will also be the trend for 2014.

 

 

 

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