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

Spending on mobile advertising will amount to USD 187 billion in 2020, more than double the USD 88 billion spent on desktop advertising and only USD 5 billion less than the USD 192 billion spent on TV advertising. At the current rate of growth, mobile advertising will significantly overtake television in 2021.

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 ad spend grew by 35 percent in 2017, and Zenith expects average growth of 21 percent per year through 2020.

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 is crucial for customer acquisition and retaining existing customers.

According to Touchpoint's ROI Tracker database, television advertising is most effective with potential consumers, while mobile advertising is 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, according to Zenith, 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. Zenith forecasts 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 to become the world's largest cinema advertising market with USD 1.2 billion. By 2020, we expect the volume there to reach USD 2.8 billion.

Print advertising continues to shrink in line with circulation. Between 2017 and 2020, Zenith forecasts that newspaper advertising will decline by an average of 5 percent per year, while magazine advertising will shrink by 6 percent. 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

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

Asia-Pacific region as a driver of global growth

The Asia-Pacific region is by far the strongest contributor to global advertising market growth. Between 2017 and 2020, this region will account for 43% of all new advertising investments - USD 32.1 billion out of a total of USD 75.1 billion. Six of the ten markets that will contribute the most to global growth are in the Asia-Pacific region: China (which alone will account for 22% of global growth), India (which will contribute 5%), Indonesia (4%), Japan (3%), the Philippines (3%) and South Korea (2%). We expect the Asia-Pacific region to account for 33.8% of global advertising revenue in 2020, up from 32.6% in 2017.

North America, currently the largest advertising market region, is lagging behind in terms of growth. This region is expected to account for 27% of new advertising investments between 2017 and 2020. North America's share of global advertising revenue, on the other hand, will fall from 37.1% to 36.0%.

"Dynamic markets in the Asia-Pacific region are leading global advertising market growth, gaining 5 to 6 percent annually," says Jonathan Barnard, Head of Forecasting and Director of Global Intelligence at Zenith. "By the middle of the next decade, this will be the most important advertising region in the world."

"Our mobile devices are becoming the gateway to our media world, but their brand building capabilities are still questionable - applying old patterns to new technologies to achieve brand growth may not work as easily," said Vittorio Bonori, Global Brand President of Zenith. "Having a clear understanding of how the entire ecosystem of paid, owned and earned media works together to drive return on investment is critical."

*Touchpoints ROI Tracker is Publicis Media's brand touchpoint measurement and planning tool, based on over 1,000,000 consumer interviews since 2004.