Global Online Ad Spending Forecast to Exceed Print in 2015

Global online ad spending will overtake newspaper expenditures next year (USD $101.5 billion vs. $93.2 billion), and will exceed the combined total of newspapers and magazines in 2015 ($132.4 billion vs. $131.7 billion), predicts ZenithOptimedia in a new forecast. That equates to almost 1 in 4 ad dollars being spent globally on the internet in 2015, second only to TV (40%).

It’s worth noting that ZenithOptimedia’s print revenue figures include only advertising in printed editions of publications. Advertising in those publications’ websites, tablet editions, or mobile applications is counted in the internet category. So, while the internet will grow at print’s expense, that may not be all bad news for publications.

Breaking down the forecast by media:

  • Newspapers will see a decline in expenditures, from an estimated $96.7 billion last year, to $90.1 billion in 2015, contributing to a declining share of total ad revenues, from 20.3% to 15.9%.
  • Magazines will also see a decrease in spending, from $45 billion last year to $41.6 billion in 2015, as their share of total spend drops from 9.4% to 7.3%.
  • TV will see an influx of spending, from $190.1 billion in 2011, to $226.5 billion in 2015, though that will not translate to any meaningful gain in its leading share.
  • Radio will see a small increase in spending, from $33.7 billion to $37.1 billion. That increase will trail overall ad spend growth, leading to a decline in share of total dollars, from 7.1% to 6.6%.
  • Cinema ad expenditures will marginally rise, from $2.5 billion to $3.1 billion, equaling just 0.6% of total spending in 2015.
  • Outdoor advertising revenues will grow from $31.7 billion to $35.9 billion, as its share of the total drops from 6.7% to 6.3%.
  • Internet advertising will jump from $76.9 billion last year to $132.4 billion in 2015, growing its share of the total from 16.1% to 23.4%.

Display to Close the Gap With Paid Search

ZenithOptimedia estimates that $28.2 billion was spent on display advertising around the world in 2011, while $37.4 billion was spent on paid search. That gap, of almost $10 billion, will narrow considerably over the coming years, according to the forecast, as display grows at an annual rate of 20%, compared to a 12% annual growth rate for search. By 2015, then, a projected $57.2 billion will be spent on display advertising (or 43% share), compared to $61.1 billion on paid search (46% share), a gap of less than $4 billion.

Powering the growth in display ad revenues will be online video advertising and social media advertising – each forecast to increase by 30% annually.

2012 Forecast Downgraded, But Better Days Ahead

In terms of total ad spend, the forecast calls for 3.3% growth this year, a substantial downward revision from a 3.8% forecast in October and a 4.3% growth forecast in June.

Still, the outlook is optimistic, as the forecast sees stronger growth in the years ahead, including a 4.1% rise next year and a 5.6% jump in 2015. Looking ahead to 2015, Latin America will see 9.4% growth, Asia-Pacific 6.8% (9.1% excluding Japan), and the US 4.7%.

Other Findings:

    • Between 2012 and 2015, an additional $76 billion will be spent on advertising globally, with the US contributing $21.2 billion, or 28%, of that total. Even so, developing markets will fuel the majority of the growth, or 61%. 7 out of the top 10 contributors to the additional spending will be developing markets, led by China ($12.5 billion additional) and Brazil ($5.6 billion).
    • The US is the largest ad market this year, at $160.8 billion, and will remain that way in 2015 ($182 billion). Japan, China, and Germany will stay in their respective positions following the US, although China will see the most rapid growth of those 3. By 2015, ad spend in China will be only about $5 billion less than in Japan (currently, the gap is more than $15 billion).
    • By 2015, Brazil will have overtaken the UK to have become the 5th-largest ad market in the world.

About the Data: All ZenithOptimedia figures are in USD and were calculated using currency conversions at 2011 average rates.