Media buyer ZenithOptimedia expects that U.S. advertising spending on TV will rise 0.9% to $67.3 million in 2016.
After the election and Olympics year, TV spending will drop 1% in constant dollars in 2017 and another 0.8% to 66.1 billion in 2018.
“TV remains medium most used by consumers,” the agency notes. “While traditional television viewing on a TV screen continues to slowly decline, overall consumption is up, driven by growth in digital video viewing, including on mobile and computer devices. Networks are continuing to focus on recapturing audiences across other screens, fueling growth of their digital and mobile business.”
ZenithOptimedia forecasts network spending to decrease by 4% in 2017 and 3% in 2018. For 2016, which will include the Summer Olympics and the Presidential Election, spending will show a smaller 2% decline.
Cable spending will increase 1% in 2016, followed by a flat market in 2017 and 2018, the agency says.
Despite strength in court shows, ZenithOptimedia projects syndication will continue to decline in 2016 (by 2%), 2017 (2%), and 2018 (3%).
Spending on the 2016 elections on local TV continues to be on track for $3.3 billion. This political investment remains the greatest influence on local market inventory. Spending by Political Action Committees (PACs) and candidates in Iowa, New Hampshire, and South Carolina – the first three states to appoint delegates for the Presidential Election – resulted in nearly sell-out conditions. With additional Senate and Gubernatorial races in key battleground states of Ohio, North Carolina, Colorado, Iowa, Nevada, Virginia, Pennsylvania, Michigan and New Hampshire, , total ad spend in local television will achieve all-time highs.
Overall, spurred by the strengthened economy, U.S. advertising is expected to increase 3.7% in 2016, 2.8% in 2017, and 3.1% in 2018.
“Digital continues to grow at the expense of print media as consumers shift their attention to consume content digitally via mobile apps and other outlets. Tablets and smartphone devices are growing increasingly popular amongst consumers, and the ways we measure and track engagement are evolving accordingly,” the agency said. “As for television advertising, although broadcast ad spend continues to account for a big chunk of spend dollars, we will start to see other vehicles chip away at its viewership.”
On the digital front, ZenithOptimedia forecasts that display advertising will increase 23% in 2015, 16% in 2016, 14% in 2017, and 10% in 2018. The display figures include banners, sponsorships, rich media, native placements and mobile.
ZenithOptimedia forecasts digital video spending to increase 18.0% in 2016 and continue this growth into 2017 (17.0%) and 2018 (17.6%). Mobile video ad spending continues to build momentum, having more than doubled since 2013. Despite consumers’ growing use of mobile devices, mobile video ad spending still lags in comparison to overall mobile ad spending. In 2015, mobile ad accounting for 36% of total digital spending, but only 23% of total digital video ad spending, the agency said.
Social media advertising will increase by 27% in 2016, 20% in 2017 and 18% in 2018, the agency says. ZenithOptimedia expects paid search to grow by 12% in 2016, 10% in 2017, and 10% in 2018.
On a global basis, ZenithOptimedia expects global advertising to rise 4.6% $579 billion in 2016 and exceed $600 billion in 2017, reaching $603 billion by the end of that year.
“The global economy faces clear challenges – such as the ongoing slowdown in China, and recession in Brazil and Russia; the humanitarian disaster originating in Syria; and uncertainty over the future of the European Union, notably continuing fragility in Greece and the possible departure of the UK,” the agency says. But it adds that advertiser confidence has remained largely unshaken, and the agency made only small changes in its forecasts since December, which it called for 4.7% global growth.
Internet advertising is the main driver of global ad spending growth. ZenithOptimedia expects internet advertising as a whole to grow at more than three times the global average rate this year – by 15.7%, driven by social media, jumping 31.9%, online video, gaining 22.4% and paid search, up 15.7%.
“Internet advertising’s growth rate is slowing as it matures (it was 21.1% in 2014), but we expect it to remain in double digits for the rest of our forecast period,” the agency said. “This sustained growth, combined with downgrades to television in Brazil in China, has led us to forecast internet advertising to overtake television advertising globally in 2017, a year earlier than we forecast back in December.”
The bulk of new internet advertising is targeted at mobile devices. The agency forecasts that mobile advertising expenditure will increase by $64 billion between 2015 and 2018, growing by 128% and accounting for 92% of new advertising dollars added to the global market over these years.
The agency identified what it called Thirty Rising Media Markets that have long-term potential for rapid growth in ad spending.
“These 30 markets vary widely in nature: in size of population, openness to international business, diversity of economic activities, productivity, and geographically – 16 of our markets are in Africa, seven in Asia, six in Latin America and one in the Middle East. What they share is that their economies are growing rapidly in the long run, and that their advertising markets are growing even faster,” ZenithOptimedia said.
The markets are: Algeria, Angola, Bangladesh, Bolivia, Cambodia, Cameroon, Côte d’Ivoire, Dominican Republic, Ethiopia, Gabon, Ghana, Guatemala, Iran, Jamaica, Kenya, Laos, Mongolia, Morocco, Mozambique, Myanmar, Namibia, Paraguay, Senegal, Sri Lanka, Tajikistan, Tanzania, Trinidad & Tobago, Tunisia, Uganda and Zambia.
“Rapid growth from countries that are relatively new to the international advertising market, combined with a resurgence of established markets that were damaged by the financial crisis, will keep the global ad market on track for healthy growth for at least the next few years,” said Jonathan Barnard, head of forecasting at ZenithOptimedia.
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