Online video is now growing faster than any other digital channel, leading a 4.4 per cent uplift in global ad spend in 2015, that will be driven by advertisers pulling more budget from TV and broadcasters selling packages that include both online and traditional TV spots, predicts ZenithOptimedia.
The media agency’s annual forecast claims that TV, while still the dominant medium for brands, has peaked. Global ad spend on television will slip from 39.4 per cent in 2014 to 37.3 per cent in 2017 as advertisers plough more of their media budgets into desktop and mobile internet.
Video will be the key beneficiary of this shift, according to the study, with audiovisual content taking an increasingly larger slice of display budgets. Online video jumped 34 per cent in 2014 and is predicted to grow at 29 per cent a year until 2017, making it the fastest growing digital category. The gathering momentum behind the channel will push it to account for 3.9 per cent of global ad spend in 2017, up from 2.1 per cent in 2014.
The emergence of advertising formats that seamlessly fit branded content on publisher sites, coupled with better cross-device measurement tools from agencies and the likes of Facebook and Google, mean that advertisers are increasingly banking on online video.
Interestingly, the report notes that broadcasters will have a role to play in budgets moving from TV into online video. Some television channels are starting to trade packages that include both online and video TV sports, while the medium is also starting to be sold programmatically. Channel 4 became the first broadcaster to sell its inventory in this way earlier this month.
Steve King, chief executive of ZenithOptimedia Worldwide, said: “Online video combines the emotional connection of television with the efficient targeting and measurable effectiveness of digital display.
“While television will remain dominant for many years to come, advertisers are increasingly utilising online video as an invaluable complement, giving them new opportunities to communicate brand values to consumers.”
Online video is also benefiting from the advent of mobile and social, which is seeing marketers think more carefully about how their content is distributed and targeted as they come under growing pressure to do more for less with their budgets.
Social media is tipped to grow at 25 per cent until 2017, while mobile advertising spend will rise by an average of 39.8 per cent in the period. It is indicative of mobile becoming a “mainstream advertising product”, claimed the report, after years of apprehension from advertisers due to measurability concerns and the limitations imposed by smaller screens.
Desktop internet advertising will grow at an average of just 4.6 per cent a year. The contrast between mobile and desktop represents a changing of the guard in terms of media channel dominance that saw global spend on the former hit $27.4bn in 2014, which accounted for 22.1 per cent of internet expenditure and 5.3 per cent of total advertising outlay.
Mobile spend on global will reach $75bn by 2017, predicted the report, which will account for 40.4 per cent of internet spend and 12.7 per cent of all ad spend. This means that mobile will surpass radio, magazines, outdoor and newspapers to become the world’s third‐largest medium by the end of the forecast period.
Globally, ad spend is being steered by the economic climate with brands spending far more in emerging markets than they are in mature areas.
China leapfrogged Japan to become the world’s second-largest advertising market in 2014 with a spend of $45.4m, according to the study. The country’s economy, widely regarded as the main growth engine in fast track Asia, accounting for 64 per cent of the region’s ad spend, is slowing and advertisers are only expected to spend $58m in 2017.
Researchers expect to see more changes at the top of the biggest ad spend markets over the next three years. In 2016, they predict the UK will overtake Germany to take fourth place, while Argentina, currently ranked 14th, is tipped to rank seventh in 2017.
