ZenithOptimedia Sees TV Ad Share Shrinking

Internet to be top global medium in 2018
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Media agency ZenithOptimedia sees TV’s share of global TV ad spending declining for the next few years from 38% in 2015 to 34.8% in 2018.

ZenithOptimedia’s forecast calls for big changes in the way marketers allocate their money. The agency sees programmatic advertising accounting for 60% of digital display in 2016, Internet advertising overtaking television spending in 2018 and mobile advertising overtaking desktop advertising also by 2018.

Spending on TV will rise to $215 billion in 2018 from $206 billion in 2015, but its share peaked in 2012 at 29.7%.

The agency says one of the reasons for television’s share losses is the rapid growth of paid search. While search functions as a direct-response channel, the agency calls “television the pre-eminent brand awareness channel—and we expect it to remain so for many years to come.”

Rather than look at traditional TV advertising, ZenithOptimedia sees what it calls audiovisual advertising—television plus online video-- as maintaining its importance to advertisers.

“Television offers unparalleled capacity to build reach, while online video offers pinpoint targeting and personalization of marketing messages. Both are powerful tools for establishing brand awareness and associations,” the agency says. “We estimate that audiovisual advertising will account for a record 48.4% of display advertising in 2015, up from 44.1% in 2010, and expect its share to reach 48.9% in 2018.

ZenithOptimedia expects global ad spending to be strong in 2016 because of quadrennial events—presidential elections in the U.S., the Summer Olympics and the UEFA football championship in Europe. Spending will be up 4.7% in 2016 and the agency expects “stable” growth in the 4% to 5% range to continue through 2018.

Mobile advertising will be the big driver of global ad spending. ZenithOptimedia sees it growing at an average rate of 32% a year between 2015 and 2018 when it will hit $114 billion, and to contribute 87% of all of the new ad dollars added to the global market during these years.

ZenithOptimedia says programmatic advertising will account for more than half of digital display advertising--53%--for the first time this year, and will increase its share to 60% in 2016. Programmatic advertising accounted for just 12% of display ad spend in 2012. It has grown from $5 billion in 2012 to $38 billion in 2015, at an average rate of 100% a year. Growth is slowing down as it extends its dominance of the display market, but ZenithOptimedia still expects programmatic advertising to grow another 34% in 2016 and 26% in 2017.

The U.S. is the biggest programmatic ad market, worth $16.8 billion in 2015 and accounting for 44% of global programmatic ad spend. The UK comes second at $2.6 billion, accounting for 7%, the agency said.

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