By Eleni Marouli, Senior Analyst, IHS Technology
Trends:
- Surprise growth in an odd year: general advertising trendsExplosion of mobile advertising = explosion of Facebook advertising
- In 2016, video will be the new mobile
- Surprising growth in an odd year, revenue up to $479 billion
- Total advertising revenues totalled $497bn in 2015 up 3.1% from 2014, according IHS Technology. In 2016, advertising will break the $500bn mark for the first time at $525m, up 5.7% from 2015
- Online advertising was the second largest advertising medium at $136bn and grew 13.1% in 2015 driven largely by mobile advertising (which grew 31.7% to $28bn) and online video advertising (which grew to 27.5% to $11bn).
- TV advertising was up 1.7% to reach $191bn, a good result for a quiet year in terms of heavily ad-supported events. The US TV ad market, which accounts for one third of global TV advertising was down -1.4% due primarily to bad comparatives. The American elections will be the primary driver of TV advertising in 2016.
- Print advertising fell for a fourth consecutive year (at -5.6% in 2015) and we expect the decline to continue in the next five years, but at a much slower rate. It amounted to $95bn in 2015.
- Explosion of Facebook advertising
- The growth of Facebook advertising and mobile advertising have gone hand in hand. Facebook accounted for 52.5% of all mobile advertising in 2015 and IHS forecasts this figure to grow to 60.0% in 2016.
But, how are other tech companies countering the Facebook mobile dominance?
AOL – got acquired by Verizon, a mobile operator and acquired Millennial Media, a mobile ad network in 2015. They will need to move fast and use their new data in a smart and efficient way to provide a compelling mobile ad offering.
Microsoft – threw the towel in and moved all of its ad sales to AOL.
Google – moving slower into mobile, the search giant will try to compete with Facebook through partnerships: 1) launched the AMP Project with key news publishers, 2) partnered with Twitter on online measurement initiative and 3) expanded their AdMob offering to attract new advertisers on the Google platform.
Yahoo – is doing some interesting work through its mobile ad platform Gemini, which is powered by Flurry data (acquired in 2013), however they will probably be acquired in 2016 before they make a significant mark in mobile advertising
Twitter - Twitter is already generating over 80% of its revenue on mobile, however it has struggled to communicate to advertisers its value as a media platform. Hopefully, new-old CEO, Jack Dorsey can communicate a more coherent vision for Twitter in 2016.
Video will be the new mobile
Video advertising will boom in 2016 and will account for a quarter of all display advertising coming from three players. Tech companies are hoping to attract TV brand dollars by investing in video properties and expanding their video ad offering (Facebook, YouTube, Twitter).
Broadcasters are acquiring (e.g. RTL acquiring SpotX and Clypd, ProSieben acquiring Virtual Minds), investing in (Sky with Sky AdSmart) and partnering (MTG with Krux, Channel4 with Freewheel) with advertising technology companies to improve and expand their video advertising revenue.
Legacy print publishers hope video will be their salvation in a competitive online advertising landscape by launching original video series (e.g. The Guardian, The Telegraph, Axel Springer, Le Figaro).
www.ihs.com
