IPG’s MAGNA GLOBAL and Publicis Groupe’s ZenithOptimedia released global advertising forecasts Monday, both noting that, in very distinct ways, mobile propels the world’s advertising industry.
MAGNA predicted mobile will go from 30% of all digital advertising to 55% by 2019, with a 53% increase this year – crossing the symbolic $50 billion mark. ZenithOptimedia similarly saw desktop remaining stable, “while every other medium will lose share to mobile,” said Vincent Letang, director of global forecasting at MAGNA.
There were two primary reasons why observers consider mobile the platform of the future: raw adoption numbers and user experience improvement.
Letang pointed to “the fundamentals”: mobile’s increasing market penetration as population hubs like China and India bring people online. “Many people will never use a computer, but they’re still Internet users,” he said.
Those adoption numbers account for recent moves like Facebook Lite, which gives the platform access to emerging markets with less bandwidth and mobile technology.
On the other hand, as Jonathan Barnard, head of forecasting at ZenithOptimedia, pointed out in an email, “We don’t see smartphone adoption as the main driver of mobile ad spend growth.” He said he doesn’t see the pie getting bigger; he sees it getting tastier.
Publishers and advertisers have made strides toward mobile marketing, which Barnard said has been mostly “interruptive and unappealing” to date, being a better environment. Digital video and social media advertising, which are both predicted to rise by 38% this year to $15.4 billion and $22.7 billion, respectively, demonstrate that making the mobile technology we have work better is just as important as plugging more users into the system.
Looking at country-by-country trends, while digital technology evolves at a furious pace, slower-moving global economic forces remain a decisive factor in ad spending. Letang said some of the regions that have been catalyzing growth for the past half-decade are now eroded.
“We’ve thought of the BRICs (Brazil, Russia, India and China) as the growth engine of the advertising marketplace, but in fact we have all four nations reducing at least somewhat in our projections,” he said.
Russia in particular, with an economic downturn of 10% or more expected this year and a war in Ukraine on its hands, is scaring off advertisers. Though ZenithOptimedia’s report, which predicted Eastern European ad spending will shrink by 8.5%, hedged by mentioning that “in the past ad spend in this region has been volatile, with large declines swiftly followed by rapid gains.”
Western Europe exceeded expectations the most.
“I was surprised that ad spend in the eurozone is strengthening,” said Barnard.
MAGNA’s forecast noted that Portugal, Spain and Greece are accelerating the EU’s advertising market. Letang said marketers are behaving as if the “PIGS” (Portugal, Italy, Greece and Spain) have bottomed out, and are scooping up deflated inventory before a potential bounce.
Despite mild downward revisions in US ad spend, Letang noted that following adjustments from the loss of predictable, even-year events (i.e., elections and the Olympics), American spending is rising at a slow, steady clip, “in line with general economic growth.”