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June 20, 2013

Online advertising spend to cross half trillion dollar in 2014

The global online advertising revenue went up by 3% in 2012 to $462bn

By CBR Staff Writer

Global online advertising market revenue is expected to cross the half trillion dollar mark in 2014, according to a report from Strategy Analytics.

According to the report, the global advertising spending went up by 3% in 2012 to $462bn and is expected increase 4% more in 2013.

The growth is driven by the social and online video advertising, which has been reported to be the fastest growing segment during the past four years, increasing the revenue by two times.

Online ad spending is expected to rise by 14% this year to $102bn accounting for 21% of total spending, while spending on traditional advertising is expected to remain unchanged during the year.

Highest growth in social ad spending is expected to be seen in Central and Latin America region in 2013 with 40% growth.

Strategy Analytics digital media analyst Leika Kawasaki said that while online video advertising revenues are growing fast these are dwarfed by spending on TV advertising.

"The 30-second slot remains unmoved by the numerous online formats emerging and represents a single, monolithic spending format compared to the relatively fragmented state of online," Kawasaki said.

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"By 2018 we expect online video advertising will represent around six percent of annual spending on TV advertising.

The longer term growth story for online video advertising is one of the most exciting in advertising."

"Traditional ad spending declined across Europe in 2012 by 7.5 percent however we expect spending to stabilise in 2013 as we anticipate strong growth in Central and Eastern European markets."

Total traditional advertising expenditure in the US has went up by 3% in 2012 to $128bn in spite of ongoing decline in print media, driven by television spending during the 2012 Presidential Elections and the 2012 Olympics.

In 2012, the US online advertising market increased to cross $30bn mark and is expected to reach $35bn in 2013.

The online advertising revenue in Central and Latin America is expected to grow 12% year on year, while in Brazil the revenue is expected to rise over the next five years driven by the 2014 World Cup and 2016 Olympics.

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