Display advertising to grow to $40 billion globally by 2014 - but who gets paid?

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China, Display advertising, Europe, India, Patrick Smith, TheMediaBriefing Experts' Blog, United States of America, WPP Group, Publicis Groupe, Advertising

Improve Digital - display ad ecosystem 2012

It’s not a bubble, it’s a boom. Global display advertising is due to double from $21.8 billion in 2010 to $42.6 billion by 2014, according to figures released today by Publicis Groupe’s Zenith Optimedia agency. But who will capitalise on that explosion in spending?

The predicted growth should add further fuel to those who are betting the farm on display advertising funding future revenue growth for news and entertainment publishers.

And it won’t be news to many readers of this site that digital is going to lead the uplift in advertising spend in the next five years – the internet’s share of total global spend will go from almost 16 percent to 21.2 percent in 2014 – but here’s how the growth in digital adspend will be broken down, according to Zenith’s boffins:

Display is the real winner in terms of new money being added to the online economy – its growth is on these readings, phenomenal. And this is why people are so excited about real-time bidding and the growth of ad exchanges – as this new revenue comes into the market, new technology gives publishers the ability to target users on an individual basis and cut down on wastage. (It's worth noting the increasing tension between adtech players - hence the revelation from Google-owned Right Media that it is effectively no longer selling Yahoo inventory directly.)

Overall, Zenith expects 2011 ad spend globally to tip the scales at $486 billion, a 4.7 percent increase on 2010. That’s going to be followed by year-on-year growth of 5.2 percent and 5.8 percent in 2013 and 2014.

World party - Euro headache?

The immediate ad spend picture for US/EU is going to be stable with a welcome boost from the Olympics, European Championships and the US Presidential Elections in 2012. So what portion of that $40 billion display ad pie is going to be gobbled up by EU/UK/US publishers in the face of frightening growth from China, Brazil and the rest? Zenith says emerging markets will drive 58 percent of new advertising dollars between 2011 and 2014. Not for nothing are WPP and Publicis swiftly buying up digital ad agencies in China, India and Vietnam – both companies spotted this trend years ago.

Here’s the full picture of global growth, showing a sharp lift in Asia-Pacific spend compared to flat growth in Europe.

Don’t let a crisis go to waste

Zenith is upbeat about the health of the ad economy despite the financial woes of the Eurozone and continued uncertainty over debt and spending in the US. The report says advertisers will see the recession as a good time to gain market share: “Brands that gain the loyalty of consumers in a downturn can reap the benefits for years to come. We therefore expect advertisers to invest their cash reserves in competition for market share, and as a way of stimulating extra consumption.”

To put some of the technology I mention in context, here’s my interview with Brian O’Kelley, founder of adtech company AppNexus and inventor of the ad exchange, earlier this year. He’s confident that online ad selling will remain an old-fashioned agency-media buyer-publisher system for the next 24 months or so, but there's a whole lotta change coming after that, with real-time bidding playing an integral role...

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