Zenith Forecasts Better Worldwide Ad Growth

TV dominant media, but mobile internet showing largest increases
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Media agency ZenithOptimedia forecasts that global advertising spending will return to the kind of growth rates seen before the financial crisis.

ZenithOptimedia sees spending growing 5.5% to $537 billion in 2014 and 6.1% in 2016. Spending grew just 3.9% in 2013, according to the agency.

Television is the dominant media, representing 40% of global ad spending, compared to 21% for the internet. ZenithOptimedia forecasts that TV spending will grow 5.2% globally in 2014.

Ad spending increases in North America will be smaller than the worldwide growth rate. ZenithOptimedia expects 4.8% growth in 2014, a 4.6% gain in 2015 and 4.3% growth in 2016.

“Global adspend will be boosted this year by the three ‘semi-quadrennial’ events – the Winter Olympics, the football World Cup, and the mid-term elections in the U.S. – which will benefit television in particular. Advertisers are also gaining in confidence as growth returns to the Eurozone, which now looks more stable and less likely to deliver more negative shocks to the world economy,” according to the ZenithOptimedia report. “In general, advertisers are in a strong position to invest in expansion, with large reserves of cash and high profitability. In view of this, we expect growth to increase in each of the three years we forecast.”

ZenithOptimedia says the Internet is the fastest growing media and that its growth will bolstered by the spread of programmatic buying. The agency sees spending on online advertising growing 16% annually from 2014 to 2016, with display advertising growing at 21% a year through 2016.

Mobile internet advertising is growing six times faster than desktop internet, according to ZenithOptimedia. With the rapid adoption of smartphones and tablets, mobile advertising is expected to grow 50% a year from $13.4 billion in 2013 to $45 billion in 2016. Desktop internet advertising is expected to grow just 8% a year.

“Advertisers are gaining in confidence as the world economy returns to stable growth. They will find plenty of opportunities to generate strong returns on their advertising investment in the fast-growing digital media, but should remember that television has lost none of its power to reach large and engaged audiences,” Steve King, ZenithOptimedia’s CEO, Worldwide, said in a statement.

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