MediAvataar's News Desk
Global adspend growth to remain steady at 4.4% a year to 2021
Adspend on social media expected to grow 20% in 2019 and account for a 13% share of global adspend
Paid search advertising will exceed US$100bn for the first time
The US ad market is responsible for nearly half of global adspend growth as growth slows across Europe
Advertisers will spend more on social media platforms than on print for the first time this year, according to Zenith’s Advertising Expenditure Forecasts, published today. Advertising expenditure on social media will grow 20% this year to reach US$84bn, while advertisers’ combined expenditure on newspapers and magazines will fall 6% to US$69bn.
Social media will be the third-largest channel for advertising this year, with a 13% share of global adspend, behind television (29%) and paid search (17%). Its growth is slowing as it matures, and is forecast at 17% in 2020 and 13% in 2021, when it will account for 16% of all global adspend.
“Social media advertising gives brands the opportunity to drive growth by using automated tools to optimise their campaigns for key business objectives,” said Matt James, Zenith’s Global Brand President. “By using first-party data from their own websites to identify potential customers on social media, brands can convert consumers who are already on the path to purchase and target look-a-like audiences more effectively.”
Meanwhile, paid search advertising will exceed US$100bn for the first time this year, reaching US$107bn by the end of 2019. Paid search is growing at 8% a year and will amount to US$123bn in 2021, when it will account for 18% of total adspend. Television advertising continues to suffer from shrinking ratings in key markets, and will slip from US$182bn in 2019 to US$180bn in 2021, accounting for 27% of total adspend in the latter year.
The US drives global adspend growth as Europe and Asia slow
The US ad market is now the source of nearly half of global adspend growth. Zenith expects it to contribute 48% of new ad dollars this year, and 46% between 2018 and 2021. The main sources of this growth are digital brands and small businesses whose ad budgets have been unlocked by the targeting and localisation capabilities of online platforms. Small businesses in the US are spending heavily on social media and paid search, and are fuelling much of the global growth of these channels. Their spending has been robust throughout 2019, supported by strong household consumption, and has not so far been undermined by worries about recession or escalating trade disputes with China. Zenith’s expectations for the US ad market have held steady at 5.7% growth since the June edition of this report was published.
By contrast, Zenith has downgraded its forecasts for Europe as poor economic performance in key markets has eroded advertiser confidence. Germany and the UK registered small economic contractions in Q2, while year-on-year growth in Russia has fallen below 1%. Zenith now forecasts 1.9% adspend growth in Western Europe this year, down from the 2.4% forecast in June, and 4.7% adspend growth in Central & Eastern Europe, down from 6.1%.
In both European regions, expectations for 2019 are well down on 2018, when adspend grew by 4.0% in Western Europe and 9.6% in Central & Eastern Europe. Some of this decline can be attributed to the absence of sporting events like the Winter Olympics and the FIFA World Cup, but the weakening economy has also eroded underlying growth.
Adspend growth is also slowing in Asia Pacific, with 4.4% growth forecast for 2019, after 6.9% growth in 2018. In this case, though, conditions have not deteriorated materially since the June forecasts, and Zenith’s expectations of growth for this year have held steady. China, Asia Pacific’s largest market by some margin, has been slowing down for some time as its scale has increased. The trade war with the US has also had some dampening effect on adspend, particularly by international brands that have had to be more cautious about their messaging and visibility. Zenith forecasts 4.5% growth in adspend in China this year, down from 7.8% growth in 2018, and an average annual growth rate of 8.7% between 2013 and 2018. China will nevertheless still be the second-biggest contributor to global ad growth in 2019, accounting for 14% of new ad dollars.
Global adspend growth steady at 4.3% to 4.4% a year
Overall, Zenith forecasts that global adspend will grow by 4.4% this year to reach US$640bn, down slightly from the 4.6% forecast made in June. Growth is expected to remain stable at 4.3% in 2020 and 4.4% in 2021 (as compared to the June forecast of 4.4% growth in 2020 and 4.3% in 2021). We would normally expect an increase in adspend in 2020, a ‘quadrennial’ year benefitting from US elections, the Summer Olympics and the UEFA Euro 2020 tournament. But given current political and economic uncertainty, brands are being cautious about committing to extra spending at the moment. This may change as the sports events approach, along with the opportunities they provide to reach valuable and engaged audiences. We will look out for signs of strengthening demand over the next few months.
“We have slightly downgraded our expectations for 2019 amid a marginally weaker trading environment,” said Jonathan Barnard, Head of Forecasting at Zenith. “But growth should then remain steady out to 2021, powered by the robust US advertising market.”
The Asia Pacific online video industry will generate US$27 billion in advertising and subscription revenue this year, up 24% Y/Y from 2018, according to a new report, Asia Pacific Online Video & Broadband Distribution 2020, published by Media Partners Asia (MPA).
This pie is forecast to expand at a robust 13% CAGR to US$50 billion by 2024, propelled by rising investment and competition, widening broadband access and ongoing development of local content, payment infrastructure and IP protection.
China, the world’s second-largest online video after the US, remains a major part of this growth, representing 59% of online video advertising and subscription revenue in Asia Pacific this year, according to MPA, although this share will contract slightly to 55% by 2024. At the same time, online video revenues in China are forecast to reach US$27 billion in 2024, up from US$16 billion in 2019, a 11% CAGR. MPA analysts have reduced earlier China forecasts as a result of economic deceleration as well as increased market maturity and regulatory oversight.
Nonetheless, China’s online video ecosystem remains highly developed, benefiting from sizable investments from digital majors Alibaba, Baidu and Tencent. These three players are absorbing sustained losses in video thanks to profitability in other parts of the business. This allows them to buy and create local premium content in volume, as well as exclusive sports rights, while developing innovative technologies and large talent pools.
In recent years, a fourth player, ByteDance, has emerged as another formidable force in China’s online video market. Between them, Alibaba, Baidu, ByteDance and Tencent will represent 69% of online video revenue in China this year, MPA forecasts. Chinese players have also started rolling out online video services in Asia, notably ByteDance in India, Japan and Southeast Asia as well as iQiyi and Tencent in Southeast Asia and Taiwan. Ex-China, APAC’s largest online video geographies by revenue are: (1) Japan; (2) Australia & New Zealand; (3) India; (4) Korea; (5) Taiwan; and (6) Thailand, with Indonesia set to overtake Thailand by 2024. Online video revenues in APAC ex-China will grow from US$11 billion in 2019 to US$23 billion by 2024, a 16% CAGR, according to MPA projections.
Commenting on the findings of the report, MPA executive director Vivek Couto said:
“The online video industry is evolving and growing rapidly across Asia Pacific. This is especially true in countries with a significant addressable broadband market, developed payment infrastructure and a dynamic local content ecosystem, as entertainment and, in some cases, sports rights move online. Government-enforced IP protection has also been relatively effective in some markets, helping drive the market forward.
At the same time, deep investments in content and technology have helped a handful of homegrown and global players to scale and dominate market share. Some of these players have access to abundant capital, with content and video distribution forming part of larger ecosystems in some cases, subsidizing costs and investment. Standalone OTT video remains loss-making in Asia Pacific on the whole, although some operators should start to see profits over the next three to five years, either in large domestic markets or as part of an expanding global and regional footprint.
Deft regulation will be key to fulfilling online video’s potential. In many instances, regulators are attempting to bring OTT regulations in line with broadcasting and pay-TV, although restrictions on foreign investment could inhibit best-of-breed competition, while imposing TV content standards on niche online services may be counter-productive. Rules on foreign content titles allowed within libraries also potentially limit consumer choice.”
MPA’s Asia Pacific Online Video & Broadband Distribution 2020 report foresees advertising models staying dominant across most of APAC over the next five years, with the exception of China, Australia & New Zealand, although subscription services are expected to gain scale in key markets. A critical mass of customers is already paying for premium entertainment online in Australia & New Zealand, China and Japan, with India and Korea not far behind.
In Japan and Korea, SVOD (subscription-based video-on-demand) will contribute a significant chunk of sector revenues by 2024. Advertising will remain dominant however, reflecting the slow-burn nature of SVOD in these markets as well as the growth of online video advertising, benefiting YouTube in particular.
In India, SVOD will account for about one third of sector revenues by 2024, although local players are also making inroads into online video advertising alongside YouTube. Disney-owned Hotstar is a strong and fast-growing number two platform across both advertising and subscription, lifted by access to IPL cricket in particular. Hotstar has also benefited from demand for catch-up content from Star India, its direct owner, as well as access to premium Hollywood entertainment. MPA estimates that Hotstar will account for more than 20% of online video advertising in India this year, while its low-ARPU subscription model has also attracted a critical mass of customers.
In Southeast Asia, advertising will remain the cornerstone of industry revenue, maintaining a 74% share of online video revenues by 2024, according to MPA. YouTube will dominate, although some local and regional platforms should gain incremental share. Southeast Asia SVOD revenues have largely been driven by Netflix so far.
Overall, the Asia Pacific pie will remain fairly evenly split between advertising and subscription according to MPA, with advertising’s share decreasing slightly from 56% in 2019 to 54% in 2024, as subscription increases its share from 44% in 2019 to 46% in 2024.
According to MPA analysis, 15 operators will account for almost 70% of Asia Pacific online video revenues in 2019. This list comprises four operators in China, three in Japan, two in Australia, and one each in India and Korea, alongside three global platforms and one regional service.
Outside China, global platforms have established strong positions in the online video landscape at this early stage of industry development. Between them, Amazon, Netflix and YouTube are on track to represent 54% of online video advertising and subscription revenues in Asia Pacific ex-China this year. YouTube continues to grow consumption and advertising, benefiting from a formidable blend of data and tech, although competition is increasing in key markets such as Australia and India. Netflix is an effective proxy for SVOD in much of Asia Pacific outside China with an estimated 13.2 mil. paying subs as of year-end 2019, according to MPA. At the same time, Amazon has made significant progress in India and Japan where it has invested in local content for its Prime Video service, complementing the growth of other Amazon services.
More global players are about to join the fray. Disney+ will make its APAC debut in Australia and New Zealand in November 2019 at a competitive price point of US$6.7 per month, likely followed in 2020 by Japan, where a similar service, Disney Deluxe, already exists today. India, Korea, Southeast Asia and Taiwan should come on stream in 2021. Meanwhile, Apple TV+ will launch globally in November 2019, with prices in Asia Pacific ranging from US$1.4 per month in India to US$6.1 per month in New Zealand.
About Asia Pacific Online Video & Broadband Distribution 2020
This comprehensive report reviews the drivers and dynamics shaping the fast-moving online video and telecoms industries across 14 Asia Pacific markets with analysis of online video subscribers and ARPUs; advertising & subscription revenues; content costs; mobile & home broadband subscribers, ARPUs and revenues; online video distribution, pricing & packaging, telco partnerships & integrations across more than 100 operators; and key regulatory, commercial and infrastructural developments.
The recent Apple launch illustrates how global tech businesses are trying to build brand ecosystems to entice and retain consumers within their brand base. Apple TV+ streaming service has been launched and is being offered free for a year with the purchase of an iPhone, iPad, Apple TV or Mac highlighting how expanding into services and software is being used to help support hardware sales. Building brand loyalty across multiple devices and getting consumer ‘buy-in’ to the benefits to inter-connectedness are key strategies for businesses continuing to seek growth.
With the excitement surrounding tech launches we would be forgiven for thinking most people already own most tech hardware and that there is little room for growth. However, longitudinal tracking insight from Kantar shows that owning more than 3 devices in the US is still increasing year on year, whether this is smartphone, tablet, laptops or wearables, and ownership is just as high in UK. Kantar’s Global Client Director, Dominic Sunnebo comments "As the range of devices available increases we are seeing growth in multiple-device ownership with over a third of the US population (+4% yoy) and 42% of UK population owning 3+ devices. Almost 10% of the US/UK populations own all four types of device."
With so many different device categories with multi-functional purposes available, it is important to understand how customers are using each device differently, their device activity preferences and where the overlap lies. Potentially the most obvious duplication of usage is between laptop and tablet. There has been much debate over whether tablets will replace laptops and if this is what consumers want. It seems that approximately half of all owners only own one device and half own both. Understanding the usage of their devices helps to explain what purpose each device serves to consumers. For those who own both devices tablet usage is skewed heavily towards entertainment (playing games/video calling/streaming tv & music), whilst the laptop is primarily used for online shopping and document editing. That said, iPad Pro, compared to other main competitors, stretches consumer usage, with a higher proportion of owners using their tablet for content viewing from Music to TV/ Films, creating/editing documents and shopping. Sunnebo adds, "In a nutshell, laptops are used as a productivity tool and tablets for entertainment. As innovation moves tablets closer towards enabling productivity activities; with detachable keyboards, bigger screen sizes and stylus utilization etc., the balance in multiple-device ownership is likely to shift in future".
Coming back to brand ecosystems, the big question is, can they really help build brand loyalty?
Comparing Operating Systems in the US and UK, Apple has the highest level of owners with 3+ devices in their OS Eco-system at 12% & 11% respectively vs. Android/Chrome OS at 2% & 1% respectively.
According to Sunnebo, "Kantar has identified that in order to achieve higher levels of 3+ device ownership within the same OS or Brand Ecosystem, the OS/brand must be one of the top brands owned in each category."
He continues, "Kantar also identified that the tablet brand owned can act as a trigger of conversion in brand switching. For example, if a consumer owned Brand A tablet and Brand B smartphone, when they change their smartphone they go for Brand A smartphone and enter a brand Eco-system."
As length of ownership increases for the most highly penetrated tech devices (smartphones) manufacturers need to think of new ways to tap in to customer spending and maximise the opportunities a loyal base of consumers can bring. Innovation needs to be purposeful & continue to engage consumers further through building seamless integrated solutions aimed at providing convenience and simplifying consumers lives. Apple has launched Apple Pay, Apple credit card, Apple TV and Apple TV+, so it seems big tech believes that building ecosystems is the future.
Alcove Realty has handed its creative duties to Wunderman Thompson, Kolkata.
One of the most renowned and trusted names in the real estate industry, Alcove Realty came into existence to set an indelible benchmark with its landmark projects. Alcove Realty is a name behind some of the finest residential projects in the city and beyond.
Alcove has redefined ‘affordable luxury’ in the home segment with Alcove New Kolkata in Serampore. This property is one of its kind to be connected by rail, road and river where residents can enjoy a personal ferry across the Ganges to the city.
Flora Fountain is yet another project that promises to add glitter to the Kolkata skyline. With 56000 sq. ft of facilities, 34530 sq. ft of garden scape and 26862 sq. ft of water scape, the G+24 Twin Tower project is a head turner in the city, situated in Topsia.
Aakriti Shroff, Director Branding and Communication, Alcove Realty said, “We were seeking to partner with an agency that would not only be responsible for communication development but also walk alongside us with strategic inputs on the brand. Wunderman Thompson came across as the best fit in the city.”
Vijay Jacob Parakkal, Senior VP and Managing Partner, Wunderman Thompson Kolkata said, “Alcove Realty is one of the leading players in the country with several unique and exciting projects. We are looking forward to partnering them and creating some good work that these projects truly deserve.”
Arjun Mukherjee, VP and ECD, Wunderman Thompson, Kolkata said, “Every new assignment is an opportunity to exercise our creative cells. I am happy that our ideas have found a new home with Alcove Realty.”
EMVIE Awards are powered by VOOT and Co-Powered by TikTok Ads and Republic TV
Mediacom India & WATConsult win Grand Emvie of the year
The 19th edition of The Advertising Club’s EMVIE Awards, one of the most prestigious events celebrating high impact media campaigns concluded on Friday, 4th October 2019 at ST. Regis in Mumbai.
The EMVIEs that champions best in creativity, effectiveness and marketing saw around 1079 entries, the highest nominations ever received with 42 agencies participating in the competition. The event that was attended by more than 1000 professionals from the Media, Marketing, Advertising and Research fraternity saw 29 Gold & 38 Silver EMVIE Trophies being presented to the worthy winners.
EMVIES 2019 was adjudged by a distinguished and versatile jury of 172 Media Professionals in Round 1 of the Judging process. The category ‘Best Media Buying Team of the Year’ which was introduced last year; was judged by 7 Specialist Jury. The Final Round of Judging saw Case Study Presentations being evaluated by 61 Marketing Leaders. The 272 shortlisted entries where then judged by research specialists.
The winners at the EFFIE Awards 2019 saw some of the mightiest names in the media and advertising industry emerge victorious.
Mindshare with 340 points was “The Media Agency of the Year”.
Wavemaker with 310 points stood second and Initiative with 135 points stood third.
Hindustan Unilever Limited was declared as “The Media Client of the Year”.
The coveted Grand EMVIE Award went to the following:
o Mediacom India bagged the Grand EMVIE for Procter & Gamble Hygiene and Health care Limited – Ariel - Now Its time Sons- Share the Load
o WATConsult bagged the Grand EMVIE for Ariston Thermo – Racold - Mind Your Language.
The Best Implementation Team of the Year went to Street Talk -A division of Signpost India for Nestle - Nestle India - Bus Shelters that talk Coffee in the category ‘Best Media Innovation: Out of Home’.
Speaking about the awards Parha Sinha, Chairperson – EMVIES Committee, The Advertising Club said “EMVIES are called the Oscars of media agency. Every year it is growing in stature and the primary reason for that is the quality of work. Every single agency had presented case studies of very high caliber and the global community will be able to access some of them through our tie up with WARC. We are all very proud of the standard of work being done by Indian agencies and the EMVIES are a celebration of that pride. It is easily one of the signature events in Indian marketing and communication calendar.”
Speaking about the changing dynamics of campaigns and the importance of being relevant, Ms. Punitha Arumugam, Digital Evangelist and Managing Committee Member, The Advertising Club said, “EMVIES continues to scale and surprise with its excellence year after year. What has really been delightful in EMVIES 2019 is agencies specialising in OOH and digital featuring in the top 10 agencies. And a digital entry also sharing the Grand EMVIE. The awards are truly and surely reflecting the emerging media landscape in the country”
The Advertising Club post the inputs obtained from the fraternity at the EMVIES Town Hall Meeting introduced the following category of which the results are as under: -
Best Media Innovation: Rural Activation
• Wavemaker bagged the first GOLD for Vodafone – Vodafone creating “WHEELS OF CHANGE” in rural Kerala.
• Wavemaker bagged the second GOLD for Colgate Swarna Ved Shakti – MAKING 3 CRORE PEOPLE IN UP EXPERIENCE THE BEST NATURAL TOOTHPASTE IN 45 DAYS.
• Initiative bagged the third GOLD for Dettol – India's First Hygiene Parliament.
• Initiative bagged the BRONZE for Harpic – Making India Toilet Proud.
• There was no Silver awarded in this category.
EMVIES 2019 continues to celebrate innovative, effective and future focused campaigns that have inspired change.