Mobile advertising will take over 30 percent of the advertising market by 2020

Spending on mobile advertising will amount to US$187 billion in 2020, more than double the US$88 billion spent on desktop advertising and only US$5 billion less than the US$192 billion spent on TV advertising. At the current rate of growth, mobile advertising will significantly overtake television in 2021, and as internet users move from desktop to mobile devices and new users move directly to mobile devices, online advertising is making the same transition. Advertising on mobile devices is growing at a rapid rate and gaining market share from all other media. Mobile advertising spend grew by 35% in 2017, and we expect average growth of 21% per year until 2020.

You have to understand it

However, brands that shift their budgets to mobile advertising may find it harder to attract new consumers and grow market share. Zenith's Touchpoints ROI Tracker database* shows that traditional mass media is more effective at driving awareness among new customers or casual shoppers. Therefore, a good understanding of the right channels for customer acquisition and retention is critical, and according to the Touchpoints ROI Tracker database, television advertising is the most effective with potential consumers, while mobile advertising is the least effective. Potential customers are 53 percent more likely to remember TV ads than existing consumers, but this drops to 41 percent for mobile ads.Targeting existing customers can certainly help brands achieve short-term performance goals, especially as mobile increasingly covers the entire consumer journey. However, mobile advertising is currently less effective at building long-term brand awareness among potential customers than traditional media. Therefore, brands with a strong mobile presence should invest more in traditional mass media to compensate for this shortcoming.

Market in China drives rapid cinema growth

Most traditional media continue to grow despite the unstoppable rise of mobile advertising, but generally at a relatively slow pace. We forecast annual growth of 1 percent for TV and radio from 2017 to 2020, while out-of-home advertising is growing by 3 percent per year. Cinema, on the other hand, is growing by 16% annually thanks to investments in new screens, successful film licenses and better international marketing. However, the main driver is the growing market in China, where ticket sales increased by 22% in 2017. China overtook the USA in 2017 and became the world's largest cinema advertising market with 1.2 billion US$. By 2020, we expect the volume there to reach US$ 2.8 billion.Print advertising continues to shrink in line with circulation. Between 2017 and 2020, we forecast that newspaper advertising will decline by an average of 5% per year, while magazine advertising will shrink by 6%. However, this only relates to advertising within print titles - publishers' online revenues are captured within the desktop and mobile internet totals, so the overall balance is not as bad as the print-only figures suggest. Research organizations in some markets - such as the Advertising Association/WARC in the UK - calculate combined print and digital ad revenues for publishers. These figures generally show that digital revenues are mitigating losses, but not compensating for them.

Global advertising market growth remains stable

We expect global advertising spend to increase by 4.5% this year. This is slightly behind the 4.6% growth we forecast in March, but mainly because we have revised our 2017 figures upwards, allowing for a tougher comparison. We now estimate that global advertising spend increased by 4.2% in 2017, compared to our previous estimate of 4.0%. We forecast growth of 4.2% for 2019 and a further 4.3% for 2020, so annual growth will be in the same 4-5% range it has been in since 2011.