MediAvataar's News Desk
Social media in-feed ads, online video and other digital formats such as paid content and native advertising are leading the growth in global advertising.
Between 2016 and 2019 they will drive 14% annual growth in total display advertising – a category that includes these formats as well as traditional banners – according to Zenith’s new Advertising Expenditure Forecasts, published today. Total display expenditure will rise from US$84bn to US$126bn over this period, accounting for 64% of all the growth in global ad expenditure. By 2019 total display will account for 50.4% of internet advertising expenditure, exceeding 50% for the first time.
Most of this growth is coming from social media (which will grow at 20% a year) and online video (which will grow at 21% a year). Social media is central to many of its users’ digital lives – it’s where they plan their social life, read their news and document their activities – and brands can use it to communicate with them very effectively. And online video is much better at conveying brand values than traditional display formats like banners. These are no longer mutually exclusive categories; indeed video advertising is now central to the growth strategies of most social media platforms.
Paid search and classified are still growing, but are lagging behind
Paid search was the largest internet advertising channel until 2015, when it was overtaken by display. Much of its recent growth has come from innovations in mobile and location-based search, and future growth will come from adapting search ads to voice-activated personal assistants like Siri and Alexa. Expenditure on paid search totalled US$78bn in 2016, and we forecast 10% annual growth to 2019, when it will reach US$103bn. Growth in paid search will therefore lag behind growth in total internet advertising, which will grow at 12% a year.
Classified advertising – advertising on dedicated web pages without editorial content, often for cars, house and jobs – was an important part of the early internet, but its share of total internet expenditure has been shrinking for many years as users have turned to free listings, auction sites and other substitutes. In 2016, advertisers spent US$17bn on internet classifieds, and we expect this total to rise by just 7% a year to US$21bn in 2019.
Television and online video consolidate their lead in brand advertising
We distinguish between television and online video advertising because they are distributed differently, generally sold differently and categorised differently by third-party agencies that monitor advertising expenditure. But for many consumers they are beginning to blur together as smart TVs and other devices deliver internet content to households’ main TV sets. Advertisers are also finding that it makes less and less sense to plan television and online video separately: they work best as complements rather than substitutes. Television supplies reach, while online video offers targeting and personalisation. Together they are becoming more important than ever to advertisers seeking to build brands. Stripping out classified and search – which are essentially direct-response channels – television and online video accounted for 48.5% of expenditure on brand advertising in 2016, up from 43.7% in 2010, and we forecast their market share to rise to 49.3% in 2019.
Global adspend to grow 4.0% this year
We forecast that global advertising expenditure will grow 4.0% to US$558bn by the end of 2017. This is down fractionally from the forecast of 4.2% that we made in June. The stronger eurozone economy has yet to feed through to advertising, and we have downgraded our forecasts for seven eurozone markets since then. Mexico’s television market has been disappointingly weak; the extended period of mourning for King Bhumibol Adulyadej has led to a second year of decline for Thailand; and Malaysia’s recovery from the downturn of 2016 has been less rapid than we hoped. These disappointments have been partially offset by the boost provided by Canada’s healthy economy to its ad market, and Russia’s return to full growth after the oil-price crash and imposition of trading sanctions.
Next year we forecast 4.2% growth in global adspend, boosted by the Winter Olympics in Korea, the football World Cup in Russia, and the mid-term elections in the US.
“Internet display is coming into its own as a brand-building media, powered by social media and online video,” said Jonathan Barnard, Head of Forecasting and Director of Global Intelligence at Zenith. “But the distinctions between online video and traditional television are being eroded, and the two work together much better than they do separately.”
“Internet platforms are continually innovating to provide advertisers with new ways of communicating with consumers,” said Vittorio Bonori, Zenith’s Global Brand President. “But newer doesn’t always mean better, and agencies must use all the data and technology available to them to determine how to combine new and old media to tell brand stories most effectively.”
Brands believe budget limits investment, whilst agencies see a lack of technological understanding
New research assessing the current and future state of the martech industry, has found that the UK and US martech market is growing exponentially as demand for new tools continues to rise.
The survey released today by Moore Stephens, the top ten global accountancy firm, and WARC, the global authority on advertising and media effectiveness, questioned more than 500 UK and North American brands and agencies, and confirms a burgeoning martech industry.
The results show that on average, brands are spending 16% of their marketing budget on marketing technology. The research also reveals that the size of the martech industry for the combined UK and US markets is estimated at $34.3bn.
Marketers are most likely to be using a martech tool for email, with 85% currently doing so. The majority also use social media and CRM tools, whereas experience optimisation and collaboration tools are currently used by around a third (37%). However, both of the latter are set for a significant rise; the survey reveals an additional quarter will invest in experience optimisation and collaboration tools in the next year.
Investment demand is driven by dissatisfaction: half (50%) of those polled state they don't have the tools they need. When analysing by agency vs brand, six in ten (58%) agencies stated they don't believe their clients have what they need and don't fully utilise the martech tools they do have.
Reflecting this, many businesses are looking to increase the investment in marketing technology: nearly half (46%) of the UK businesses and more than one in three (38%) in the US are looking to increase their investment in the next 12 months. Only 7% of US businesses and 4% of UK firms are looking to decrease.
When considering what holds marketers back from implementing martech tools, limited budget is unsurprisingly the biggest barrier, with 42% stating so. For marketing and communications agencies, 57% said that the main barrier to investment is a lack of understanding of the marketing technology available. This is compared to just a quarter (25%) of brands polled.
Commenting on the findings, Damian Ryan, Partner, Moore Stephens, said: "We carried out this research to better understand the size of the market and the drivers behind its growth. It is only recently that martech has been given its own name, having previously been engulfed by the adtech umbrella.
"The growth of the market shouldn't come as a surprise to brands, agencies or anyone in the media industry. We are entering a new chapter of business, one that will be governed by trust and economic common sense.
"While the rise of digital has been utterly spectacular, it has brought about widespread mistrust in the marketplace and channels that underline its success. We've seen the phenomenon that is fake news, as well as adblocking and a general worrying absence of transparency.
"These are just some of the drivers leading organisations to invest in technologies to provide a greater sense of control. Martech is growing and we see it as the industry to watch for the foreseeable future for investment and product innovation alike."
Amy Rodgers, Research Editor, WARC, said: "The marketing technology market has grown at a phenomenal rate over the past few years as marketers are required to do more, at a faster pace, than ever before. Tools that can assist or automate parts of this job are in high demand, especially as the evidence for their return on investment grows. This research indicates that martech use in the UK and US is set to grow by 10% over the next year, a strong indication of the strength of a market that is continually consolidating and diversifying."
WPP’s Government and Public Sector Practice announce the appointment of Sean Howard to the role of Global Managing Director. The Government Practice works with government policymakers and communicators worldwide to help them deliver their policy objectives.
Since launching in 2012, The Government Practice established WPP Executive Education programmes in Government Communications and Behaviour Change at the Blavatnik School of Government, University of Oxford and the Lee Kuan Yew School of Public Policy, National University of Singapore. And this year, published The Leaders’ Report at The World Economic Forum in Davos, providing the first global benchmark of government communications capability.
The Government Practice CEO Dr. Michelle Harrison said, “Sean’s proven track record in converting complex, large-scale contracts with horizontal, multi-disciplinary teams will be a real asset to our future growth. As Global Managing Director, Sean will work with me to develop our largest pursuits, oversee our thought leadership programme and support The Government Practice regional leaders in ANZ, Singapore, India, the Middle East, the EU and the UK.”
Sean has been with WPP agencies since 2005, first joining Wunderman to help build the Seattle-based integrated Team Microsoft and lead the pitch to become T-Mobile’s agency of record. In 2012, he became Managing Director of Y&R New York, where he successfully led the pitch for the U.S. Navy’s – a $450+MM, 5-year contract that partnered six WPP agencies into a unified team serving the Navy in its recruiting and advertisingadvertising and recruiting effortsbusiness.
Sean will continue to advise the UShis current role on the U.S. Navy in his new role, as well as oversee the U.S. government business development efforts, drawing on 100+ WPP specialist agencies to build bespoke, horizontal teams for the Federal, State and Local governments. Of the appointment, Sean said, “I fundamentally believe that open, two-way communication between a government and its citizens is critical to the ongoing growth and prosperity of a nation. WPP’s vast and deep service offering across the marketing spectrum, free of internal silos normally associated with groups of marketing agencies, makes us the instinctive partner for governments to understand and engage with their citizens. I couldn’t be more thrilled than to help carry this message forward.”
Y&R today announced the promotion of Annie Boo to Chief Executive Officer Y&R China, across all offices in Shanghai, Beijing and Guangzhou.
Named among Campaign Asia Pacific’s Women to Watch 2016, Boo became the network’s youngest leader when she was named Managing Director of Y&R Shanghai early in 2015. As national Chief Executive Officer Y&R China she will also oversee Beijing and Guangzhou to ensure a more connected countrywide operation. Boo works alongside creative partner Ong Kien Hoe, who was named national Executive Creative Director late in 2016.
Under Annie and Kien’s co-piloting effort, Y&R Shanghai was ranked top 3 most creative agency in APAC and top 2 most effective agency network 2016. The agency’s business has continued to grow under Boo’s leadership with flourishing client relationships and new business categories won.
In the newly-created role of CEO Y&R China, Annie Boo is tasked with investing in and sharing resources, raising Y&R profile, driving collaboration to win new business, developing new agency skills and ultimately helping growth and profitability.
Having graduated in law with an LLB honors degree, Annie’s real career started as a young account person moving rapidly up the ranks to become the regional account lead for Tiger Beer Global led out of the Y&R Malaysia office. She broadened her agency experience by moving to Shanghai as the lead for a wide group of accounts including B2B, international fmcg brands like Pepsi beverages and Fonterra. A stint as Client Services Director at JWT back in her native Malaysia, was followed by her return to Shanghai, and Y&R in 2015.
Y&R’s Global President David Patton said, “Annie is renowned for her passion and bravery, as someone who will always fight for what the agency believes in. She has ably demonstrated her leadership qualities at Y&R Shanghai which, both creatively and revenue-wise, has been growing strongly. By unifying the many talents of our offices in China, we move ever closer toward Y&R’s goal of achieving our ‘sweet-spot’ where creative, technology, strategy and data meet.”
Commenting on her new role Y&R China CEO Annie Boo said, “These are exciting times for Y&R in China, as we continue to build our new offerings, and we strive toward more integration – of agency capabilities within each office and now across all three. There is much to gain from our offices working more closely together in key areas such as social, digital and production investment. Together with Y&R Beijing’s Luis da Rosa and Y&R Guangzhou’s Michael Xia, we look forward to building an even stronger, more connected Y&R China team.”
Half of New Zealand businesses are falling behind as more consumers and businesses Switch On to contactless payments.
Mastercard research found over 50% of bars, pubs, cafes and restaurants accept contactless payments, but half of Kiwi businesses are lagging in acceptance.
“It’s great that half of Kiwi businesses understand the benefits they can get from accepting contactless payments and have turned the technology on. The Switch On campaign aims to provide information to those retailers who have not yet enabled the technology, perhaps because they have misconceptions about how it works or think their customers don’t want it,” says Peter Chisnall, Country Manager for Mastercard New Zealand and the Pacific Islands.
A recent Mastercard survey of over 1000 New Zealand consumers found 78% of respondents said they had increased their use of contactless payments in the past year, citing it as convenient and easy (75%) and saves time (73%).
44% of those surveyed said they use contactless most in supermarkets, followed by 21% in retail shops.
If available, New Zealanders said they would value using contactless payments most at retail shops (24%), cafés and coffee shops (23%) and petrol stations (18%).
Many Kiwi businesses are already seeing the benefits of switching on to contactless payments.
Seven Mart manager Farid Rahabneh says “As a convenience store we want to be convenient for the customer. We switched to contactless 8 months ago because of demand from our customers – and since switching we have found we’ve saved a lot of time, as well as made our customers happier.”
Despite growing acceptance and familiarity, contactless payments still suffer from some perceived security concerns, with 88% of New Zealanders fearing if they lost their card it could be used for small purchases, and 44% believing there are security risks at the terminal.
“Contactless payments are one of the most secure ways to pay. By simply tapping your card on the terminal, the card remains in the customer’s hands at all times which improves the speed and security of the transaction. In addition, Mastercard holders can feel confident that even if they are unlucky enough to have their card is stolen or used fraudulently, they are covered with Zero Liability protection,” adds Chisnall.
Shane Howell, Chief Product Officer, Westpac, says “We can see some of the misconceptions about contactless payments being debunked by customers and retailers alike as use increases – with lots of people knowing they can use it for purchases over $80 when using their PIN. We encourage retailers who haven’t yet turned on the technology to check out the information on the Switch On website so they can understand what benefits they might be missing out on.”