Significantly More Advertising Across Mobile, Video, Social
Text The Dentsu Aegis network has released an update of its "Ad Spend Forecasts", semi-annual projections for global ad spending, indicating numbers are "better than expected" for 2018. Growth in ad spending will increase from 3.3% in 2017 to 3.9% in 2018 – higher than the 3.6% predicted in January 2018.
Total investment will rise to $613.5 billion. Global events such as the Winter Olympics and Paralympics, the FIFA World Cup in Russia, and the US Mid-Term elections will play an important role in stimulating growth.
Where budgets are being spent in 2018
Digital on the rise
Digital media spending is projected to increase by 12.6% in 2018 – more than three times that of all media combined (3.9%) – to reach sums of $230.6 billion. This marks an increase of $25.7 billion compared to the previous year.
Online video (+ 24.6%) and social media (+ 21.6%) show especially strong growth. Paid search continues to claim the largest digital share (39%). As predicted, digital will, for the first time, overtake TV this year, achieving 38.4% of total ad spend worldwide, up from 35.5%.
In the US, digital spending is expected to overtake TV in 2019. Programmatic ad spending is expected to increase by 23.2% in 2018 and 19.1% in 2019, as the ability to implement programmatic purchasing strategies across formats and devices presents an opportunity for advertisers to reach their most valued audiences on a large scale.
Traditional media spending is expected to decline by only -0.5% in 2018 and by -0.4% in 2019. Newspapers and magazines are likely to continue their downward trend with a drop of -7.5% and -6.5%, respectively. Radio (+ 2.0%), out of home (+ 2.2%) and cinema (+ 5.9%) are expected to grow at stable rates.
It is forecasted that TV spending will rise again in 2018 (+ 1.2%), after a decline of -0.7% in 2017, and remain an important medium with 35.5% of total investment.
Mobile continues to grow
The mobile device is increasingly becoming the primary point of access for all digital services and content. According to Statista, 52.2% of worldwide online traffic was generated via mobile phones in 2018, compared to 50.3% in the previous year.
People now spend an unprecedented amount of time on their smartphones – more than five hours a day. This increase in usage is mainly due to the widespread availability of high-quality digital video.
The consumption of mobile videos is exploding across all age groups and content categories. Nine out of ten social media users watch videos on their smartphone, while 70% of their time on social media is spent on mobile apps.
According to this, mobile is expected to account for one-quarter (25.2%) of global advertising spending this year, exceeding the previous forecast of 24.8%. With new platforms and solutions, such as the demand for mobile payment, mobile advertising spending is expected to increase by 23.3% in 2018 and 18.8% in 2019.
A summary of the most important facts:
- Projected growth was corrected from 3.6% (January 2018) to 3.9%
- Digital is set to overtake TV for the first time, with 38.4% of global share (TV with 35.5%). In 21 of the 59 covered markets, digital will be the leading advertising channel in 2018
- One-quarter (25.2%) of global ad spending is being invested in mobile devices for the first time ever
- China's advertising market is expected to grow 6.5% – from the previous forecast of 5.4% – to RMB 630 billion, claiming16.2% of global advertising investment. The e-commerce platforms Baidu, Alibaba, and Tencent (BAT) are expected to contribute to around 80% of this growth
- Advertising spending in the US will continue to grow in 2018, rising 3.4% to $ 217.3 billion, reflecting the stronger US economy
- Investments in UK ad spending are expected to increase by 4.2% to £20.4 billion, despite the impending Brexit
Get more information about the DAN Global Ad Spend Report here >>
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