What’s On

Mobile ad spend to overtake desktop in 2017: Dentsu report

As digital continues to drive disruption in advertising, mobile advertising spend is expected to overtake desktop this year, reaching 56 per cent in terms of share of global digital advertising spend, according to Dentsu Aegis Network’s forecast. By 2018, mobile ad spend will grow further to account for a total of USD 116.1 billion.

Asia-Pacific advertising spend is forecast to exceed the global average, reaching 4.3 per cent in 2017 and 4.6 per cent in 2018. The value of the ad spend market will hit USD 200.5 billion in 2018, a 34.1 per cent share of worldwide ad spend. Within APAC, India will have the highest forecast growth rates in 2017 and 2018, at 13.0 per cent and 12.2 per cent respectively. China, Indonesia, Philippines and Vietnam are the other high-growth ad markets in the APAC region having benefited from rapid economic development and upbeat domestic demand. In contrast, the economic situation and advertising market remains challenging in 2017 in Hong Kong (-8.2 per cent), Singapore (-0.5 per cent) and Taiwan (-2.4 per cent).

Commenting on the latest ad spend forecasts, Jerry Buhlmann, CEO of Dentsu Aegis Network, said,“We are reaching a tipping point in ad spend now as digital overtakes television, mobile overtakes desktop and paid search overtakes print. Digital and data must now be the default settings for advertisers. Evolving to people-based marketing rather than audience-based marketing and using data to increase addressability is essential for brands to manage tighter conditions in 2017 while positioning themselves for future growth.”

Dentsu forecasts global ad spend growth falling from 4.8 per cent to 3.8 per cent this year. However, conditions are set to improve in 2018 with forecast growth in ad spend of 4.3 per cent. Events will play a key role in 2018, with events such as the Winter Olympics & Paralympics in South Korea, the FIFA World Cup in Russia and the US Congressional elections all expected to stimulate ad spend growth.

Nick Waters, CEO of Dentsu Aegis Network Asia Pacific, said, “The Asia Pacific region continues to be one of the world’s most exciting opportunities to reach a set of consumers that are maturing rapidly. Advertising expenditure in the region is forecast to exceed the global growth rate in 2017 and 2018, reflecting the region’s increasing purchasing power in markets such as China, Indonesia, Philippines and Vietnam. Digital media spend, in particular, is disrupting traditional advertising channels as brands grasp the potential of data-driven, people-based marketing solutions. This is both an opportunity and challenge for brands in Asia as they look to embrace the potential of new innovation. China, in particular, is seeing a strong emphasis on digital media spend which is predicted to account for more than half of the total spend by the end of the year, fuelled by mobile spend, mobile search and programmatic spend.”

In 2018, digital will overtake TV in global share of advertising expenditure for the first time. Digital’s share of total media spend is predicted to reach a 37.6 per cent share in 2018 (up from 34.8 per cent in 2017), versus 35.9 per cent for television (down from 37.1 per cent in 2017), amounting to a total value of US$215.8 billion. Reflecting the continued disruption by digital technology of the print media industry, Paid Search (advertising within the sponsored listings of a search engine) is forecast to overtake traditional print media (newspapers and magazines) in 2018.

Within digital, online video is set to grow by 32.4 per cent; social by 28.9 per cent; and programmatic by 25.4 per cent in 2017.

Video’s growth was driven largely by the increasing popularity of OTT platforms and social videos among millennials. While Video represents an emerging 4.6 per cent of total ad spend in 2017, its investments are rapidly growing and it is forecast to match Magazine’s 5.6 per cent share of spend in 2018.

Denstu’s report also underlined the need for brands to embrace the potential of disruptive technologies such as virtual reality, artificial intelligence and voice activation. However, research suggests that only 8 per cent of brands currently intend to use virtual reality for advertising purposes.”The challenge for brands is to ensure that they are ready to embrace the potential of new innovation. As technologies such as virtual reality and voice activation become more prominent, brands must ensure that they remain relevant by creating new value for their consumers,” Mr Buhlmann added.

Shubhi Tandon

Shubhi Tandon is the Assistant Editor at Digital Market Asia. Fascinated by the evolving digital media industry, she has focussed on tracking developments in the Asia Pacific market since 2014.
Search