April 4, 2017

Internet advertising expenditure to exceed US $200bn this year

Global internet advertising expenditure will grow 13% to reach US$205bn in 2017, according to Zenith’s new Advertising Expenditure Forecasts.This will be the first year in which more money will be spent on internet advertising than advertising on traditional television (which will total US$192bn).

The sheer scale of internet advertising means its growth rate is slowing. Internet ad spend grew 17% in 2016, down from 20% in 2015, and the report expects growth to slow to 13% in 2017, 12% in 2018 and 10% by 2019 (though it will continue to add US$23bn-US$24bn a year). In this environment, it is vital that platforms and publishers address advertisers’ valid concerns about viewability and brand safety to secure sustainable growth. As the market matures, advertisers need to know for certain that their ads are being actively viewed by real people in appropriate environments.

“Internet advertising has contributed all of the growth in global ad spend since the beginning of the decade, and has stimulated much of the innovation we’ve seen in the market,” said Vittorio Bonori, Global Brand President. “Innovation is proceeding as fast as ever, and we believe that this is what will continue to drive brand growth for advertisers.”

The global ad market has grown at a steady pace of 4%-5% a year since the beginning of the decade, and Zenith expects it to continue to do so through to 2019. The forecast for 2017 is for 4.4% growth (unchanged since the last forecasts in December), down slightly from 4.6% growth in 2016. There also should be another 4.4% growth in 2018, followed by 4.2% in 2019. These rates are slightly below the growth rates that the IMF forecasts for nominal GDP.

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