ZenithOptimedia downgrades adspend growth predictions thanks to print declines

  • Advertising
  • December 12, 2014
  • StopPress Team
ZenithOptimedia downgrades adspend growth predictions thanks to print declines

The forecast for print adspend in 2015 and 2016 is rainy with a chance of bankrupt, according to ZenithOptimedia's new Advertising Expenditure Forecast.

“It’s hard to see where New Zealand print media are going to arrest their slide,” ZenithOptimedia group business director Alex Lawson says.

While online revenues for 2015 are expected to rise, ZenithOptimedia had to downgrade its total adspend predictions by one percent. 

It predicts adspend on print media will be down three percent (a drop of $15m*) for newspapers and down seven percent (a drop of $15m*) for magazines. 

“As these mediums continue to slip from the traditional spend and reach behemoths that they were, we’ll see if they can re-invent themselves to a future relevant product for consumers, maybe an easier task for the print magazine industry than printed newspapers,” Lawson says.

ZenithOptimedia's prediction for total adspend in New Zealand in 2015 is now sitting at $2.3 billion.

It predicts global adspend will grow 4.9 percent to reach US$545 billion in 2015.

ZenithOptimedia says while global adspend is growing, it won't grow as fast next year due a lack of big global events like the Winter Olympics, FIFA World Cup and US mid-term elections in 2014. Growth should pick up again in 2016 because of Summer Olympics, US Presidential elections and the UEFA European Football Championship.

Here in the deep south Pacific, our adspend shouldn't be too shaken by global events like the US elections and European champs, so ZenithOptimedia predicts a steady increase in adspend of 1.6 percent from 2015 to 2016, rising a further 1.8 percent through 2017.

Mobile is the biggest driver of the growth in spending on advertising, globally. Between 2014 and 2017 mobile advertising will account for more than half of all new advertising dollars in the market, ZenithOptimedia says.

"ZO expect mobile advertising to grow by an average of 38 percent a year between 2014 and 2017, driven by the rapid spread of devices, innovations in ad technology and improvements in user experiences," it says.

Despite massive growth in the mobile sector, its share of adspend is still miles behind mobile media consumption.

According to ZenithOptimedia, mobile will account for 6.2 percent of all adspend in the US this year, while eMarketer estimates it will occupy 23.3 percent of media consumption time. 

How come? Apparently advertisers are finding it tricky to make conventional display advertising look good on mobile, and not be too annoying.

Mobile banners take up more screen space for customers, and are found to be more intrusive. 

Plus mobiles don’t accept cookies, so retargeting and tracking from the ad to the purchase is very difficult for most platforms.

However, social medis channels like Facebook and Twitter are making it easier by launching programs that can track from desktop to mobile, which should make life easier for advertisers.

ZenithOptimedia thinks mobile is going to expand rapidly in New Zealand.

“For NZ we see mobile expanding at a significant rate in 2015 but that trajectory lessening in 2016 as we become more saturated. 

"Along with Social and Video we see the main increase in mobile to be search based, serving a functional rather than brand need," ZenithOptimedia general manager Sophia Quilian says.  

Brand executions still work better on larger format devices such as desktop and tablet, she says.

*This story previously stated incorrectly that print and magazine ad spend would drop to $15m. 

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