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Ad Spending Will Accelerate In 2014 As Buyers Flock To Mobile: Report

It’s time for ad companies to release their year-end forecasts, and ZenithOptimedia is out today with a bullish one  – largely tied to big increases it expects for ads on smartphones and tablets. ZenithOptimedia logo It projects global spending  in 2014 to hit $532B – a 5.3% increase vs this year which is +3.6% from 2012. (The new projection is up slightly from the company’s forecast in September for spending to grow 5.1% in 2014.) The Winter Olympics and mid-term elections should propel spending in North America 4.6% from this year’s $166.9B, which is +3.3% vs 2012. But mobile is the big story. The medium “is now the main driver of global adspend growth,” it says. “This is the first time in the past 20 years that a new platform is expanding overall media consumption without cannibalizing any of the other media platforms.” By 2016 mobile should become the fourth largest ad medium, ahead of radio, outdoor and magazines, ZenithOptimedia says. This is the first time the company also has made some three-year projections. It says that global spending on mobile will hit $45.4B in 2016, up from $13.5B this year. In the U.S. ad sales for mobile display will increase 239.4% by 2016 to $6.4B. Smartphone penetration will grow to 77.3% from 54% in 2013, while 37.1% will own tablets, up from 23.8%. Over the same period, global ad sales on television will increase by $29.8B, but its market share will slip to 39.3% … Read More »

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Ad Forecasters Say TV And Digital Will Benefit Most From 2012 Growth: UBS Confab

Three of the most prominent ad-forecasting firms kicked off the UBS Annual Global Media and Communications Conference this morning — as they typically do at this event — by unveiling their updated forecasts for 2012. And they pretty much agree: 2012 will be better than 2011. MagnaGlobal is on the conservative side, projecting 3.2% growth in North America, and GroupM is more bullish at 4%. MagnaGlobal EVP Vincent Letang says that the U.S. ad market will benefit from the strongest-ever quadrennial effect with $2.4B hitting the market from political campaigns, and $600M related to the Summer Olympics in London. That’s why GroupM Futures Director Adam Smith warns that the ad-growth number in 2013 — without the quadrennial effect – ”might be harder to look at.” The forecasters agree that television and digital will benefit most from the growth in ad spending. But they warn that pay TV providers need to watch out: Subscriptions “will go down by 500,000 a year for next five years” partly due to competition from Web video providers such as Netflix, says ZenithOptimedia CEO Steve King, whose company released its forecast last night. He also says that there’s a reason to take the forecasts with a big grain of salt. “The factor that none of us have incorporated is a default” by European country.

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3.5% Ad Sales Growth For Major U.S. Media In 2012, ZenithOptimedia Predicts

The ad firm’s forecast will set an upbeat tone for the Monday kickoff of the UBS Annual Global Media and Communications Conference, the widely watched series of CEO briefings that runs through Wednesday in New York. Zenith’s projected 3.5% growth, to $160.3B, contrasts with +2.2% in 2011. Much of the improvement is attributable to the predicted excitement around the Summer Olympics in London, as well as the recovery of Japan’s economy following the earthquakes and tsunami in March. That will help to drive large financial companies, retailers, and auto makers back into the ad market. Television will be the main beneficiary, with a 5.1% increase to $61.9B. But the Olympics won’t be enough to stop the ad slide at the major broadcast networks (-1% to $16.9B). The problem is the time difference with London: That “will mean fewer events airing live than there were for the Vancouver Olympics,” Zenith says.  It predicts that more viewers will “tune in online to watch their favorite events rather than wait to watch pre-recorded versions.” Syndication will suffer a bigger decline (-12% to $2.2B) as studios struggle to find a daytime host who can match the popularity of Oprah Winfrey. But national cable networks including USA, TBS, and FX will continue to improve (+10% to $20.1B).

In other media: The Internet is still soaring (+16.4% to $30.3B) and will be helped in 2012 by political candidates hoping to reach voters on social media destinations led by Facebook. The Olympics … Read More »

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