Zenith upgrades its 2018 ad spend projections

Digital spending – and ad tech firms – are benefiting most from marketers' push for innovation.

Publicis-owned media agency network Zenith predicted 2018 would see a 4.1% bump in ad spending worldwide back in December, but it has increased its projection to 4.6% in the March edition of its Advertising Expenditure Forecasts report.

Canada’s ad market is expected to grow similarly this year with a projected 4.6% increase over last year. As in years’ past, that growth is expected to come in digital spending.

The firm expects global spend to reach US$579 billion by the end of the calendar year thanks largely to increases in Argentina, China, Ireland and the Philippines.

North America is expected to see a 3.4% lift over last year’s spending, with an average 3.2% increase per year until 2020. Canada and the U.S. are being outpaced on spending growth by Eastern European and Asian markets, as well as those in South America.

Where Canada was ranked as the tenth-largest ad market globally at the end of 2017 (at US$9.7 billion), Zenith’s projections see it falling off that list by 2020 as Indonesia looks to grow to US$11.78 billion in size.

The report says Canada’s total ad expenditure will reach CA$14.3 billion by 2020, an 11.4% increase from CA$12.8 billion in 2017.

Online media remains the hottest growth area. In Canada, Zenith’s “Internet” spending category is expected to account for CA$7.1 billion of the total CA$13.4 billion ad industry this year. By 2020, Zenith projects internet spending will hit CA$8.3 billion.

The print, television and radio categories are projected to continue the declines charted in previous years, with television dropping 5.7%, newspapers dropping 27.1% and radio dropping 3.0% between 2017 and 2020.

Globally, digital ad spend grew 13.7% in 2017, accounting for 37.6% of all ad spending, Zenith said. In 2018, the report’s authors say that portion will increase to 40.2%.

However, that increase will be seen on mobile devices, not desktop. Mobile internet advertising accounted for 19.8% of global ad spend last year, but is expected to reach 29.3% by 2020. Desktop internet, however, is expected to drop from 17.8% last year to 15.3% in 2020.

The report also notes interesting growth in ad tech firms alongside digital’s increasing prominence.

“Zenith tracked the revenues of 14 listed ad tech companies between 2010 and 2016, and found that their revenues grew five times faster than online revenues over this time,” the company said on its website. “[Advertisers] have also invested heavily in innovation – since 2010, companies in the OECD have increased their investment in research and development three times faster than they have increased their adspend.”