Advertising spend in Australia will continue to grow but at a weaker rate next year and until about 2022, according to analysis by Zenith.
Australian adspend is expected to grow by 2.1% in 2019 and 1.1% in 2020.
Internet adspend in Australia is still expected to grow by 7% this year, driven largely by online video. This will reduce to 4% in 2020 and the following year in light of pervasive economic uncertainty,
But there will be a resurgence of Internet adpsend in 2022, growing by 6%, as the economy stabilises and the implications of 5G and its technologies are fully realised.
“Assuming that the economy stabilises both locally and globally, we do anticipate a stronger market from 2022," says Zenith Sydney’s head of investment, Elizabeth Baker.
"Although we’re expecting a slow down, digital advertising in all its forms will continue to grow at a healthy rate. This reflects both the continuing migration of audiences to online platforms and the transformational impact of 5G."
Zenith’s Advertising Expenditure Forecasts show global advertisers will increase ad spend by 4.3% in 2020 but commercial audiences will shrink by 1.6%.
Traditional mass audiences are shrinking: first print, and now television in key markets.
Many lost audiences are replacing television viewing with non-commercial video like Netflix, Amazon Prime Video, HBO, and eventually Disney+, reducing available audiences and creating fragmentation.
Zenith says the use of adblockers means that some audiences have low exposure to digital advertising. This rising demand and falling supply is increasing prices rapidly.
The supply of commercial audiences has shrunk by 1.3% a year on average since 2010, according to exclusive Zenith research, while media inflation has averaged 6.5% a year.
“The days when we could find audiences all in one place are long gone," says said Matt James, Global Brand President at Zenith.
"Now, however, technology empowers us to find them wherever they are, online or offline, and win back value for our clients through efficiency and effectiveness – by ensuring that we target and reach consumers with the right message at the right point in the consumer journey."
Online video and social media will remain the fastest-growing channels between 2019 and 2022, growing respectively by 16.6% and 13.8% a year on average, thanks mainly to continued increases in consumption on smartphones.
Cinema will be in third place with 11.5% annual growth, driven by surging demand in China, but will still only account for 0.9% of global adspend in 2022.
Television will record zero growth over the next three years, as price inflation counterbalances the decline in global audiences.
Prices are rising for printed newspapers and magazines as well, but not quickly enough to compensate for the persistent and rapid decline in readership.
Newspaper adspend will shrink by 4.5% a year to 2022, and magazines will shrink by 8.1% a year.
“As geopolitical tensions wipe out most of the expected gains from sport and elections, 2020 will be a disappointing quadrennial year for the ad market,” says Jonathan Barnard, Zenith’s Head of Forecasting.
“If the trade war is settled, we are more confident for 2021, forecasting 4.5% growth in global adspend despite the absence of the quadrennial events.”
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