ZenithOptimedia: Stable ad growth in 2013 paves way for recovery in 2014 and 2015

Advertising, Media

The global advertising market is set to enjoy the same healthy rate of growth experienced in 2012 – which saw ad spend boosted by the London Olympics and the US elections – reflecting the extent to which the advertising market is now stabilizing.

According to the latest Advertising Expenditure Forecasts from ZenithOptimedia (ZO), the global advertising market is on course to grow 3.5% in 2013, the same rate experienced last year, but without the boost of the quadrennial effect. It is the same growth rate ZO predicted in Q2 2013 and the lack of a downgrading shows there is now some stability in the global advertising market.

Expectations for 2013 leveled after a long period of slow erosion by bad economic news. ZO expects stronger growth over the next two years – of 5.1% in 2014 and 5.9% in 2015 – primarily due to the European economy, currently acting as a brake on global ad growth,
becoming healthier.

The Eurozone came out of its 18-month recession in Q2 2013, and its economic recovery is expected to gather pace gradually over the next couple of years. The Eurozone ad market should follow suit. Eurozone adspend shrank 5.2% in 2012; we forecast a smaller decline in 2013 of 4.3%, followed by 0.7% growth in 2014 and 1.9% growth in 2015.

Despite these prospects for recovery, a steeper-than-expected decline in Eurozone adspend in the  first half has weighed down the forecast for growth in mature markets (to 1.4% from 1.7% in June). Still, there aren’t signs of slowdown in the rising markets.

Economic growth has slowed in the BRICs (Brazil, Russia, India and China), among other rising markets, as demand for their exports has weakened and international investors have begun to turn their attention to Mature Markets.

Still, those markets have young populations with improving education, infrastructure, productivity and adoption of technology. Their contribution to the world economy will continue to grow for decades to come. Advertisers have not been put off by the recent problems and are investing for the long term. ZO increased its forecasts for adspend growth in rising  markets to 7.6% for 2013, from 7.0% forecasted in June.

After the recent violences, ZO reduced its forecasts for Egypt from 3.9% growth to 6.3% decline in 2013, with this disruption not spreaded to nearby ad markets. Therefor, ZO forecasts 4.8% growth for the Middle East and North Africa this year (down from previous forecasted 5. 5% growth).

After several false starts, mobile advertising finally took off and is is expected to account for 37% of all growth in global ad expenditure this year, and 31% in 2014. ZO counts as mobile all internet ads delivered to smartphones and tablets, whatever their format.

Mobile advertising is still relatively small (expected total of US$14.3bn worldwide in 2013 or 2.8% of total ad expenditure), but it grows extremely fast. ZO’s forecast is of 77% growth in 2013, followed by 56% in 2014 and 48% in 2015. By 2015, mobile adspend is etimated to reach a total of US$33.1bn and account for 6.0% of total ad expenditure.

Desktop internet advertising continues to grow more rapidly than any of the traditional media, even though mobile costs are substantially lower. ZO forecasts 8% growth in desktop adspend in 2013 and 2014, and 7% in 2015, expecting total internet advertising – desktop and mobile – to account for 20.4% of all ad expenditure in 2013, up from 18.3% in 2012, and to rise to 24.6% in 2015.

The stability of global adspend growth this year – a year without big events like the Olympics and US elections – shows that the advertising recovery is on track, promising even stronger growth in 2014 and 2015. The increasing penetration of mobile handsets is playing a key role in driving advertising growth across the world

Steve King,

CEO ZenithOptimedia’s Worldwide.

When it comes of Romanian market, this one doesn’t grow yet, with ZO estimating a decrease of adspendings of 3.6% for 2013. The internet remains the only medium posting growth and performance media generating an important share of this growth.

For Romania, internet will reach in 2013 a share of 12% from the total ad consumption. TV investments are slightly decreasing (-3%), while press remains the main affected medium, with a decrease of 15% for newspapers and of 10% for magazine.

ZO estimates the annual trend will change in 2014 and expects a single digit growth to continue in 2015  .

ZenithOptimedia’s Advertising Expenditure Forecasts report contains forecasts of advertising expenditure by medium for 80 countries. It has been published continually since 1987, and is used by agencies, media owners, banks, analysts, consultants, academics and governments around the world.