Following 3.8% growth in 2011, global advertising spending is expected to grow by 4.9% in 2012 to $465.5 billion, according to the latest Global Advertising Forecast from Strategy Analytics.
The U.S. ad spend will increase by just 2.7% compared to that global 4.9%. still, that beats 2011’s meager 0.6% growth. The U.S. will trail Europe as well, where ad spending is expected to grow by 3.7% to $136.3 billion in 2012.
Not a bad picture, globally. Ed Barton, Strategy Analytics’ Director of Digital Media Strategies, chalks the gains up to such major global-impact events as—
- The Summer Olympics
- The U.S. presidential elections
- The European Football Championships
- Japan’s continued recovery from the earthquake
Global Advertising by Media Type
Looking at spend by media type reveals that global TV advertising is expected to grow by 5% in 2012 to $188.5 billion, equivalent to 40% of all global spending. Global print advertising is expected to grow by 0.5% to a 26.4% share. Other traditional formats including cinema and radio will grow by approximately 4%.
By contrast, global online advertising is expected to grow 12.8% to $83.2 billion and 18% of global ad spending. Barton says, “Online advertising will continue along its growth trajectory fuelled by strong growth in emerging markets and increased spending volumes on social networking and online video advertising.”
U.S./Europe Advertising by Media Type
Online spending will lead in terms of growth in the US: online is expected to grow by 6.7% this year to $27.4 billion, versus 3.7% for TV and 2.9% for other traditional formats. Print is expected to decline by 1.5%.
In comparison, online advertising across Europe is expected to grow by 11.7% this year compared to 3.4% for TV and 2.4% for ‘other traditional’ advertising. Print is expected to decline by 0.1%.
Still says Barton, the U.S. will continue to lead the world in the share of revenue generated by TV advertising, which this year will be approximately 41% compared to 35% in Europe and 24% in the UK. Internet ad growth lags the world, but, will overtake print ads in 2016, a year ahead of the global market.
One caveat: “The [Eurozone] is one defining incident away from all forecasting outlooks…being rendered irrelevant,” says Barton. One natural disaster or economic collapse could shatter spending in a region of unsustainable national and household fiscal deficits.
A second caveat: this forecast does not include mobile advertising in online advertising. Mobile advertising is forecasted to reach $2.61 billion in the US in 2012, alone, representing 47% growth over 2011. At nearly 10% of the $27.4 billion projected for other online ad spend with its 6.7% projected growth, mobile stacks up very well.
Sunset for Print
As Leika Kawasaki, an analyst at Strategy Analytics's digital media strategies practice told DMNews, “Advertising is moving to online. We see clear online growth over traditional print advertising, which is shrinking in the US.” Kawasaki sees no major shifts in the role of print ads, as the “watershed” has already occurred: the shift of classifieds and locally-targeted campaigns to online advertising.
Thus, “Print spending in newspapers tends to be dominated by retailers looking to drive store traffic,” which too will continue to erode in the U.S. where print readership continues to decline.
“The 79 million Millennials in the U.S. have an estimated purchasing power of $170 billion dollars per year," said comScore Vice President Bert Miklosi. "Their comfort-level with the Internet and technology in general makes the digital medium an ideal platform for reaching these individuals.”
The digital market research firm has released its report Next-Generation Strategies for Advertising to Millennials. The report highlights results from the company’s study that identifies unique characteristics of the “Millennial generation” (persons born between 1981 and 2000, thus, 12-31 years of age). comScore examined Millennials’ responses to different types of advertising, including TV and digital, compared to older generations, and how marketers can most effectively target this demographic segment.
The medium is ideal, but the Millenial is generally more difficult to persuade via advertising than their older counterparts. This said Miklosi underscores “the importance of creative and messaging optimization in driving worthwhile returns from an investment in advertising to this segment.” Also true, to quote the report, “It is harder for advertising to achieve breakthrough and catch the attention of Millennials, who are notorious for multitasking and short attention spans.” In fact, their immediate recall is the lowest of any age group—at 43%, 9% lower than that of seniors. Still, their delayed recall was strongest among age groups, at 24%.
Courtesy comScore, Inc.
Other key findings:
- The defining characteristics of Millennials include their comfort-level with new technologies and cultural diversity, as well as being accustomed to on-demand access to entertainment, continual stimulation and extreme multitasking.
- Millennials tend to be less interested and more difficult to connect with, capture attention, impress, convince and entertain. Millennials also appear to be more price-sensitive, perhaps due to lower disposable incomes.
- Digital advertising performs better in relative terms among Millennials than does television advertising.
- Across generations including Millennials, the presence of key creative elements in advertising, coined by comScore as the Validated Drivers, were shown to relate strongly to successful advertising.
- Millennials are highly engaged with the content that they choose to view, within both television and digital environments. Engagement has been shown to amplify the effectiveness of advertising, so when targeting Millennials, it is important to utilize engaging content to help boost returns from investments in advertising.
AdWeek is speculating that Apple will deliver its iTV in 2012. AdWeek referred to a report by analysts Sterne Agee, which suggested the success of an Apple television would depend largely upon the selection of content. “Content is a key factor in how people are adopting streaming set-top boxes,” observed MediaBeat. Apple is rumored to be in talks with media companies, CBS included, about creating a streaming platform that would circumvent cable companies: customers would purchase content the way they purchase music from iTunes. iTunes largely circumvents advertisements as well, and there is no speculation as yet how advertising will fit in at iTV.
$6.50 of every ten dollars in ad money is being spent on television, according to research from The Nielsen Company, maintaining TV’s status as the top advertising medium -- especially in emerging markets. Global advertising rose 8.8 percent year-over-year in Q1 to total US$ 118 billion based on published rate cards, as advertisers spent more on television and continued to invest in booming consumer Asian and Latin American markets. According to the new Nielsen Global AdView Pulse report, television advertising rose 11.9 percent year-on-year and increased its share among other traditional media (radio, magazines, and newspapers) from 63.5 percent to 65.3 percent in both developed and emerging economies.