Several key media owners have been reporting growth in their ad revenues towards the end of last year, leading ROI agency ZenithOptimedia to pronounce Europe’s worst is behind it.
The agency’s latest ad spend report may have recorded a 3% contraction in 2013, but it stated that most of this came towards the beginning of the year as advertisers are now committing higher budgets.
Eurozone ad spend is being forecast to rise by 0.7% this year, which will be the first time there has been growth for four years. The figure is in line with the economic growth of countries such as Germany (0.7%) and France (0.5%) in 2013.
Minnows will grow in 2015
Struggling countries like Finland, Italy and Greece might be shrinking now, but when they stabilise next year it will spur the Eurozone on to adspend growth of 1.6% in 2015 and 1.7% in 2016.
While Europe’s advertising industry is on the cusp of seeing an upturn in fortunes, it still lags behind all other markets apart from Japan, according to Zenith. North American growth stands at 4.8%, whereas Latin America’s 11.8% is setting the pace.
Globally, there will be an increase of 3.9% in 2013 to 5.5% in 2014. Then in 2015 and 2016 growth will rise by 5.8% and 6.1% respectively. Zenith puts this down to the spread of programmatic buying and mobile advertising’s rapid ascent.
Display to overtake paid search
Zenith expects display to overtake paid search in 2015, which it reveals is down to interest in programmatic buying. By 2016, global internet display ad spend will have reached $74 billion, more than the $71.1 billion of paid search.
Meanwhile, mobile adspend, which has been consistently growing faster than desktop for some time, is now expanding at a rate that is six times faster. Zenith predicts that it will grow by an average of 50% a year between 2013 and 2016.
Digital media fuelling the growth of ad spend now and over the next few years, but Steve King, ZenithOptimedia’s CEO, worldwide, warns that television still has a large part to play because of its reach.
“Advertisers are gaining in confidence as the world economy returns to stable growth,” King said. “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.”