Advertising expenditure around the world (both online and offline) is expected to get close to $600 billion next year, predicts eMarketer. That means a 6% increase over the global ad spending for CY2014. The US, China, Japan, Germany and the UK will be the top five spenders on advertising, says the report.
Earlier in the year, eMarketer had put the total ad expenditure across the globe for the year 2013 to be $545.75 billion and predicted it to touch $575.04 in 2014. However, in the latest report, the company has revised the figures for 2013 and 2014 with actual spending.
Global spending on advertising expected to touch $667.65 billion in 2018
Ad expenditure across the world was $481.6 billion in 2011. It grew to $503.15 billion in 2012 and $516.47 in 2013. In 2014, it increased by 4.9% in 2014. eMarketer had earlier forecasted global ad spending to grow to $667.65 billion by 2018. With the revised forecast of 2015, apparently, it’s quite convincing that global spending, including digital and mobile internet, will surpass the $750 billion mark in 2018. In its latest report, eMarketer has estimated that Global ad spend will reach $592 billion in 2015.
2014 was a year bustling with online activities. The biggest of all events was the World Cup 2014, followed by Winter Olympics and the US mid-term elections. With 2015 being a year devoid of any major activity, the growth rate will take a small dip before again improving to 6% in 2016 – a quadrennial year which will see the US Presidential elections and the Olympics besides the UEFA European Football Championships.
In the year 2017, the rate of growth will again suffer a setback and fall to 5.2% since no major international events are scheduled over that year.
Internet Advertising Growing Much Faster than Total Media Ad Spend, Trend to Continue
Expenditure on ads related to the internet medium (or digital ad expenditure), which includes computers, smartphones and tablet devices, is expected to grow and be almost $170.50 billion in 2015.
Only a decade back, only 4% of the total ad spend was spent across the internet – it has now risen to 24%. So, how is the expenditure on digital ads increasing?
Obviously, this increase has come at the cost of a fall in the share of expenditure on radio ads, magazines and newspaper ads.
Digital ad spending will continue to grow at a faster rate than total media expenditure on ads and constitute nearly one-third of the total global ad spend by 2018. It is expected to grow to $204.01 billion by that period, taking into account the figures extrapolated by the same agency at the beginning of the year.
U.S. Continues To Be the Biggest Spender on Ads in Each Category
This graph shows region-wise spending on advertising by the five main players in this arena.
Talking of region-wise spending on advertising, North America is the highest spender on digital advertising, and the US is the single biggest spender. The top five spenders in each category (total paid media, digital and mobile) are the US, China, Japan, Germany and the UK.
In CY2015, nearly 32% of the total ad dollars will be pumped in by the US, while it will also contribute to almost 35% of the digital ad market and 44% of mobile ads.
Marketers are expected to spend a total of $189.06 billion on ads in the US alone. That means they will spend more on ads than the next four key players (China, Japan, Germany and the UK) combined.
The United States will continue to be the leading spender on ads in each category till 2018.
Percentage Mobile Spending On Ads All Set to Increase
Of the total expenditure on advertising over the planet, mobile ads are the main driving force at present. The expenditure on mobile ads will form almost 10% of the total expenditure on ads in 2015 and more than 37% of the digital ad spend.
This is keeping pace with the rapid smartphone penetration and greater internet access with every passing day.
In spite of that, ad expenditure on mobile ads is well behind its share of media consumption, according to Advertising Expenditure Forecast released by ZenithOptimedia. They project mobile ad spending to account for 6.2% of the total ad spend in the US, though it consumes more than 23% of the media consumption time.
Their report further goes on to explain the reason why digital advertising does not deliver as well across the mobile platform. Compared to desktop display, mobile banners take up more screen space, are considered more intrusive, and are more likely to annoy consumers than engage them. Mobiles don’t accept cookies, so retargeting and tracking from the ad to the purchase is very difficult for most platforms.
In the US alone, where Smartphone penetration is the highest, the percentage of contribution of mobile ad contribution is really surprising. Similarly, In China, where more than half of the population uses smartphones, mobile contributes less than 15% of the country’s total ad spend. On the worldwide level, most of the emerging countries, including China and India, are witnessing exploded growth in the smartphone and mobile industry, a mere 11% contribution coming from mobile as spend is enough to surprise the marketers.
Key Takeaways:
- Digital and Mobile Internet marketers must focus on the US in 2015.
- While China, Japan, and Germany could be a tough nut to crack for global marketers due to local language challenges, the native English-speaking UK could be the next target on the radar.
- Internet marketers stay focused on Digital marketing ad spend as the share of mobile internet is a mere 11%. On the other hand, digital marketing has been registering phenomenal growth for the last few years.
