Internet ad spend to overtake newspapers in two years

Smartphones and tablet devices and technologies that make it easier for advertisers to calculate a return on their investment, mean spending on advertising on mobile devices is set to rise by 77 per cent worldwide in 2013, media buying agency Zenith Optimedia said. Mobile advertising – display, classified or search – is growing seven times faster than desktop internet, which is increasing at an average 10 per cent a year.

The UK’s mobile advertising market will more than double in size this year to £1bn on the back of the growth of smartphones and tablets, Zenith added.

Jonathan Barnard, Zenith’s head of forecasting, said: “Consumers are now using their phones as a day-to-day part of their lives to keep in touch with their friends, and the trend is evidenced by social media giants like Facebook and Twitter using mobile advertising as a main source of their revenues.”

Zenith predicts that internet advertising will increase its share of the global ad market from 18.3 per cent in 2012 to 24.5 per cent in 2015, while newspapers and magazines will continue to shrink at an average of 3 per cent a year.

The report said: “We forecast internet advertising to overtake newspapers for the first time in 2013, and then exceed the combined total of newspaper and magazine advertising in 2015.”

The figures include only advertising in printed editions of publications, not on their websites, tablet editions or mobile apps, all of which are picked up in the internet category.

Overall, the global advertising market is set to grow in 2013 at the same 3.5 per cent rate seen in 2012, despite that year being boosted by the London Olympics and the US elections.

With signs emerging that the European economy is becoming healthier, Zenith said the global ad market should enjoy stronger growth rates of 5.1 per cent and 5.9 per cent in 2014 and 2015, respectively.

It said Europe had been acting as a “brake on global ad growth”, with spending on adverts in the eurozone shrinking 5.2 per cent last year.

The US will remain the biggest contributor to new advertising spending, and it is expected to provide 28 per cent of the $74bn that is set to be added to global ad spend between 2012 and 2015.

The UK, which has the fifth biggest ad market in the world, is set to provide £1.1bn of the growth during this period.

Zenith is the forecasting unit of Publicis Groupe, the world’s third-biggest advertising group by sales after WPP and Omnicom.

Ad agencies Publicis and Omnicom have announced plans to merge.