Forecast: Right healthy 2014 ad spending
ZenithOptimedia is predicting growth of 4.9 percent for the year
April 8, 2014
Though the media economy has seen great recovery from its struggles during the recession, it still has some ways to go before things return to pre-crash levels.
Growth continues to come in increments as opposed to bursts.
The latest forecast from ZenithOptimedia reminds us of so many updates over the past several years. The London-based agency is raising its outlook for 2014, but only by a couple of tenths of a percentage point.
ZenithOptimedia now forecasts that U.S. ad spending will grow 4.9 percent this year, up from its December forecast of 4.7 percent growth.
While that would seem a particularly brisk pace, that figure includes election and Olympic ad spending, which account for much of that increase.
“While we are well past the worst of the economic downturn, economic growth remains slow,” notes the report.
ZenithOptimedia says that most economic indicators were steady in 2013, such as retail sales and decreases in unemployment, and that stability should carry into 2014.
Still, some advertisers remain wary. The housing market showed some weakness as the year ended, and job creation is not as robust as many would like.
Plus the changing media habits of Americans are reshaping the way advertisers invest their money.
The bulk of it still goes to television, where spot TV is poised for a big year with $1.9 billion in spending on the midterm elections and cable will gain from the continued shift of sporting events from broadcast.
But digital will once again see the strongest year-to-year gains. ZenithOptimedia forecasts 18.4 percent growth for digital in 2014, paced by social media, video and mobile.
Social media advertising will soar 35 percent this year, with mobile helping to drive much of that spending.
Already more than half of ad revenue for top social media sites like Facebook and Twitter comes from mobile, and there are high expectations for the rollout of advertising on Instagram, a site that is dominated by mobile users.
Online video ad spending will shoot up 27 percent this year. TV networks are able to charge premium prices for their internet content, since it is in limited supply compared to video sites like YouTube where there are millions of videos.
But longer term, web video faces the challenge of providing reliable measurement to advertisers as people increasingly view video across multiple platforms, such as PCs, laptops, smartphones and tablets.
Finally, mobile is expected to see the biggest growth of any media category, and ZenithOptimedia has begun breaking down mobile advertising within each subcategory of digital, such as mobile display, mobile video and mobile search.
Spending will grow by more than 50 percent across each major mobile subcategory, and that will only speed up over the next few years, as mobile becomes the No. 1 way to use the web.
“Smartphones have outsold PCs since early 2012, and comScore estimates that mobile internet users will surpass desktop internet users as soon as this year,” notes the report. “With more accountability and the ability for advertisers to calculate ROI, we will see even more dollars in this space.”
Of course, with the growth in digital comes the correlating decline in print. Newspapers will take another 8 percent hit in advertising this year, predicts the report, while magazines will be off 1.1 percent.
“Print will continue to suffer as technology replaces paper with touchscreens and digital ink. Our largest decreases for 2014 are for newspapers and magazines,” says the report.
U.S. Ad Spending
|TOTAL MAJOR MEDIA||
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