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Tag: Global Ad Trends

  • Retail media is set to draw over a quarter ($93.8bn) of all search adspend this year, notes Warc

    Search is King!

     

     

    Search marketing is on the cusp of its most consequential transformation since Google first introduced its sponsored keyword search auction over 20 years ago, and the more recent introduction of the use of data and algorithms to provide greater personalisation in search results.

    Now a third era of search beckons – one defined as much by image or video as text, and by artificial intelligence and natural language processing, in which marketers shift from targeting keywords to targeting intent and context.

    WARC Media’s latest Global Advertising Trends report, Search 3.0, explores the impact of retail media on advertisers’ paid search investments, the growing role of social platforms on search journeys, and the rise of generative AI search.

    Author of the report, Alex Brownsell, Head of Content, WARC Media, says: “The search market is on the cusp of an era of innovation. Google’s long-standing market dominance is set to come under unprecedented pressure as consumers pivot away from text-based search towards discovery on social, generative AI reinvents the search experience, and the explosive growth of retail media, the majority of which is search-orientated, continues.”

     

    Steady growth for search, even in tough times

    Amidst an ongoing digital ad market slowdown, traditional search spend (excluding retail media) is proving to be resilient. While global advertising investment is forecast to grow just 2.9% to $907.2bn this year, paid search, the largest media channel by ad spend globally, is set to increase 6.2% according to WARC Media.

    40% of the global search market is in the US, where WARC Media forecasts a robust 12% growth rate this year, taking its value to nearly $100bn.

    In APAC, where social commerce is far more established, paid search’s share of advertising budgets falls to 17%. Japan, the APAC market outside of China with the biggest search spend, is forecast to see search investment expand to $7.4bn in 2023. In China search spend is expected to grow to ¥131bn ($19bn).

     

     

    The search market, including retail media, is forecast to reach $350.4bn in 2023

    Retail media has transformed the search advertising market over the last few years. According to WARC Media and GroupM forecasts, total search advertising spend, is set to be worth $350.4bn this year, of which just over a quarter (26.8%) will come from retail media, valued at $93.8bn.

     

     

    As brands commit more budget towards retail media, and the number of platforms increase, marketers may be forced to make trade offs where their ad spend goes. Advertisers will also need to rethink their approach to paid search and SEO, and particularly how their brands show up towards the bottom of the purchase funnel.

     

    Search experiences are fragmenting across platforms

    Younger audiences increasingly favour searching for information and inspiration on visual platforms such as TikTok, Instagram, Pinterest and YouTube or RED, Douyin and Zhihu in China. According to data from GWI, in 2020, 19.2% of internet users turned to TikTok to search, rising to 27.5% last year.

    As search evolves into a “system for exploration” and search strategies diverge depending on category and demographic, Google’s dominance of the global search advertising market is being challenged.

    According to WARC Media, whilst Google remains the dominant force in search and is forecast to earn $176.4bn in advertising revenue in 2023, its share of total search, which includes retail media, is set to drop from 51.0% in 2021 to 50.4% in 2023.

    Over half (53%) of global advertisers surveyed by WARC for The Marketer’s Toolkit 2023 report said they plan to increase ad investment with Google this year, down from 59% the previous year.

     

    Generative AI threatens to disrupt search behaviour

    A race has begun to develop the most compelling AI chatbot search product. Microsoft plans to incorporate OpenAI’s ChatGPT – estimated to have become the fastest-growing app in history, reaching 100 million monthly active users in only two months – into Bing.

    However, as it stands, Bing is only forecast to earn a 5.2% share of the global search market in 2023, per WARC Media. Yet the news was deemed a “code red” situation for Google, which has subsequently rushed to launch Bard, its conversation technology.

    The arrival of generative AI will cause major considerations for brands, such as how paid ads will fit into the conversational nature of the content, the partiality of chatbot responses, risk of content misinformation and misalignment with brand guidelines.

     

    Download a complimentary sample report of WARC Global Ad Trends: Search 3.0 here.

     

    Global Ad Trends, is a quarterly report which draws on WARC’s dataset of advertising and media intelligence to take a holistic view on current industry developments. It is part of WARC Media, which provides rigorous and accurate benchmarks aggregated and verified from over 100 reputable sources, empowering media decision makers to plan strategies with precision. WARC Media is available by subscription.

  • Helping brands speedily identify, adapt and successfully meet challenges

    WARC releases Marketer’s Toolkit 2022: Global Trends Report

    By Our Staff

     

    WARC has released the Marketer’s Toolkit 2022: Global Trends Report, the first in a series of six volumes for marketers.

     

    This 11th edition of The Marketer’s Toolkit brings together insights from a survey of 1,500 marketing executives, one-to-one interviews with more than 25 leading Chief Marketing Officers, and a review of WARC’s latest proprietary research, best practice guides and case studies.

     

    Said Aditya Kishore, Insight Director, WARC: “Far from signalling a return to normal, the opening up of economies has only created a new set of challenges for marketers. Attitudes, behaviours and market structures have resulted in significant change during the pandemic, and a huge 97% of respondents to our proprietary survey believe changes to consumer behaviour will impact strategies in 2022. Providing a wealth of information, the WARC Marketer’s Toolkit 2022 is designed specifically to support decision making in the coming year and give confidence to adapt at speed, identify and maximise opportunities, and help optimise marketing effectiveness.”

     

    The ‘double bottomline’ – valuing profit and the planet – is now a reality for 46% of survey respondents who say they afford the environment and financial growth equal importance. Actions include changing manufacturing, packaging and distribution, making public commitments they will be accountable for, and encouraging green consumer behaviours in their messaging.

     

    58% of participants agreed sustainability and purpose initiatives ought to be distinct, but there is still work to be done on measurement with 25% of respondents viewing sustainability as a “general goal” rather than using specific metrics.

     

    The full series, available to WARC subscribers, will include a Global Ad Trends: State of the Industry report, with latest analysis and forecasts of advertising spend across 100+ markets (end November); regional reports looking at the challenges and opportunities specific to APAC, EMEA and North America (January); and the Future Thinking Report, focusing on emerging metrics and technologies and a suite of podcasts (January 2022).

     

  • New from the insights major shows global advertising spend is on course for 12.6% growth this year to reach US$665bn

    WARC Adspend Trendwatch

     

    By Our Staff

     

    Global advertising spend is on course for 12.6% growth this year to reach US$665bn, an upgrade from 6.7% initially projected, as the global ad market rebounds strongly from the Covid-19 downturn of last year, finds WARC, the international intelligence service. Further growth, of 8.2%, is forecast for 2022, by when the global advertising market will be worth more than US$700bn.

     

    New quarterly research from 100 markets by WARC finds that advertising spend in Q2 2021 rose 23.6% to a total of US$157.6bn – a new high for a second quarter period and the strongest rise in over a decade.

     

    Growth in the second quarter was driven mostly by online formats, which collectively saw spend rise by 31.2% versus the previous year. eCommerce (+59.5%) and search (+50.6%) were star performers, though offline media – most notably linear TV (+11.5%) – also fared well.

     

    The second quarter rise in global ad trade followed on from 12.5% growth in the first quarter; consequently, at US$311.5bn, global ad investment was 17.8% higher during the first six months of the year than during the same period in 2020.

     

    New research lays bare the scale of the 2020 ad recession. While total spend fell by 5.4% – approximately half the rate initially estimated – spend on offline media such as print, radio, TV and cinema fell by a fifth, or US$63bn, equating to the worst downturn for this sector in WARC’s 40 years of market monitoring.

     

    Spend online, however, rose by 9.4% ($29.2bn) last year, buoyed by rising eCommerce (+27.4%), social media (+18.3%) and online video (+15.9%) investment.

     

    Online media gained 10 percentage points in budget allocation last year in the automotive and financial categories, a rate of increase that was double the pre-pandemic average. All product sectors are allocating more of their ad budget to online formats than before the pandemic.

     

    Online formats are also leading growth in 2021, with WARC forecasting spend on eCommerce advertising to rise 35.2% this year, mostly to the benefit of Amazon. Brand spend on search – where Google is the largest player – is set to rise by over a quarter (26.2%) this year, while online video spend is expected to be up by 17.7% and social media by 13.1% this year. All of these formats are expected to record growth in 2022, too.

     

    Said James McDonald, Managing Editor, WARC Data, and author of the report: “New quarterly research, collated from 100 markets worldwide, shows for the first time the true extent of the digital shift in response to the coronavirus outbreak last year. Growth in online adspend has typically tracked some 20 percentage points ahead of offline media, but in the final quarter of 2020 this leapt to a remarkable 41 points – an absolute difference of $41bn.Investment in offline media fell by $63bn worldwide in 2020, marking the worst year in living memory for the majority of media owners. All media are forecast to record growth this year, with most sustaining this into 2022. Yet, as has been seen before, it is the online platforms that are set to benefit most from the ad market’s recovery.”

     

    Trends by media and format 2021/2022

    :: Linear TV: Spend is projected to grow 7.1% – or $11.1bn – to $168.1bn this year, equal to a quarter (25.3%) of the global ad market. Investment is expected to rise by a further 2.7% in 2022, though this means only 60% of 2020’s losses will be recovered by 2022.

    :: Out of home: Double-digit growth is expected in both 2021 (17.4%) and 2022 (11.2%) as the medium recovers from the lowest level of investment in over a decade. This year will see $34.9bn being spent and this is set to rise to $38.8bn next year, though this still leaves the market $2.6bn short from 2019’s level of investment.

    :: Cinema: Spend was heavily curtailed in 2020 and a strong recovery looks underway. Cinema is forecast to be the fastest growing medium in both 2021 (149.9%) and 2022 (26.9%), taking total investment to $3.4bn next year.

    :: Linear radio: Investment in radio ads is projected to increase by double-digits (10.4%) – or $2.5bn – this year. However, spend in 2022 will largely be flat (0.8%) to a total of $26.6bn.

    :: Newspapers: Advertising spend on print newspapers will rise by 4.8% this year, the first growth recorded in a decade. This puts the total at $29.6bn, before a mild decline of 1.0% is projected for 2022.

    :: Magazines: Investment is expected to rise by a modest 2.5% this year before falling into decline of 4.3% next year. This means magazine brands in 2022 will have recovered just 5% of 2020’s lost advertising revenue.

    :: Social media: Social formats, combined, were among the strongest performers in 2020, recording total growth of 18.3% to a total of $99.2bn. Social spend is set to rise by 13.1% in 2021 and a further 10.1% in 2022, by when the market will be worth $123.5bn – approaching a fifth (17.2%) of all advertising spend worldwide.

    :: Online video: Online video spend rose 15.9% to reach $54.9bn in 2020. Growth is forecast to accelerate to 17.7% this year, with a rise of 15.9% predicted in 2022.

    :: eCommerce: Brand spend on eCommerce platforms leapt 27.4% last year as shoppers migrated online in response to social distancing guidelines. Advertising growth in this sector is now expected to accelerate to over a third (35.2%) in 2021, pushing the market’s value to a total of US$85.2bn. Further growth, of 11.4%, is forecast next year.

    :: Paid search: The search market recorded its first decline on record during the second quarter of 2020, though a strong finish to the year meant investment was up by 5.4% during 2020 as a whole. Rapid growth, of 26.2%, is forecast for 2021; the search market grew by a record 50.6% during Q2 2021 alone. Growth will then ease back to 4.3% in 2022, by when the market will be worth $151.9bn, 21.1% of all adspend.

     

    Trends by region 2021/2022

    :: North America: Spend in the largest region (with a 38% share of all investment) is expected to rise by 12.8% this year to reach $254.9bn, driven by a 12.7% increase to $242.5bn in the US and a 14.5% rise to $12.3bn in Canada. North America will see spend rise 8.4% next year to reach a new high of $276.3bn.

    :: Asia Pacific: Regional advertising investment is projected to increase by 12.8% this year to top $200bn for the first time. This will be driven by the Chinese ad market, which is expected to grow by 16.3% to top $100bn for the first time. Japan (+8.9% to $44.4bn) and Australia (+11.6% to $12.2bn) are also set for full recoveries this year. India, however, will see strong growth (+16.1% to $8.2bn) but 2021 investment will not fully recover 2020’s losses.

    :: Europe: Spend in Europe is expected to rise by 12.1% this year to reach $154.6bn, with 6.5% growth projected for 2022. Spain (+16.6% to $7.6bn) and the UK (+15.5% to $33.3bn) will be the quickest growing major markets this year. Russia (+14.4% to $9.3bn), Italy (+11.9% to $9.9bn), France (+11.4% to $15.7bn) and Germany (+9.7% to $26.6bn) will also see strong growth, though Spain and Russia will not recover all of 2020’s losses this year.

    :: Latin America: Ad investment is projected to rise by double-digits in both 2021 (16.9%) and 2022 (11.1%) to reach $24.8bn next year. However, this is still down 7.8% from 2019 levels owing to a steep contraction in 2020, particularly in the region’s largest market – Brazilian adspend (in US dollar terms) fell by more than a third in 2020, with 22.3% growth projected for this year and a 12.4% rise expected in 2022 (to reach $13.2bn).

    :: Middle East: Following a one-quarter decline in spend last year, regional advertising growth will be 6.2% this year and will then accelerate to 15.1% in 2022. This puts total investment at $13.2bn next year, $1.2bn less than the pre-pandemic level in 2019.

    :: Africa: Spend is projected to rise by 9.7% this year to reach $6.2bn, with further growth of 7.3% expected for 2022.

     

    Trends by product category (Five largest in 2022)

    :: Telecoms & utilities: The quickest growing category pre-pandemic shows no sign of slowing as advertising spend is expected to grow almost twice as quick as the wider ad market in 2021 and 2022. Total investment will increase by 21.1% this year and then 11.2% next year to reach a projected $95bn, extending telecoms & utilities’ lead as the largest advertising category.

    :: Media & publishing: Advertising spend from media brands is expected to top $70bn worldwide this year for the first time, growing 18.3% (the third quickest rate) and easily surpassing the mild decline last year. Further growth of 6.9% is expected in 2022, with online media expected to take an almost three-quarters share of total investment, up from one-quarter in 2013.

    :: Business & industrial: Investment from business advertisers is forecast to rise by double-digits (10.6%) this year to equal $69.3bn. Growth of 7.7% is expected in 2022, the third quickest rate that year, which will take total adspend to $74.6bn and within touching distance of overtaking media & publishing as the second largest category.

    :: Retail: A cut to advertising budgets of $6.2bn last year will only just be recovered this year – investment is projected to rise by 11.1% to reach $66.2 in 2021, just 0.6% higher than pre-pandemic spend in 2019. WARC Data’s analysis of company reports also finds that while some retailers were modest in their ad cuts last year, like Amazon (-0.9%) and Best Buy (-2.5%), others were more severe – Walmart (-13.5%), Carrefour (-22.8%) and TJX (-34.5%) cut their adspend by double-digits in 2020.

    :: Financial services: Steep cuts to automotive advertising last year has pushed financial services into the top five largest categories. Total investment is projected to rise by 17.9% in 2021 and this will push spend above $50bn for the first time. Additional growth of 7.0% is expected next year, furthering its lead over sixth placed automotive.

     

    A sample report of WARC’s Global Ad Trends: Ad Investment 2021/22 is available for all here. WARC Data subscribers can read the report in full.

     

    Global Ad Trends, a bi-monthly report which draws on WARC’s dataset of advertising and media intelligence to take a holistic view on current industry developments, is part of WARC Data, a dedicated independent and objective one-stop online subscription service which rigorously harmonises, aggregates, verifies and evaluates data from over 100 reputable sources.

     

  • Estimates indicate that mobile overtook desktop internet for the first time in 2017

    Global adspend to accelerate in 2018: WARC

     

    By A Correspondent

     

    WARC, the international marketing intelligence service, has released its latest monthly Global Ad Trends report digesting up-to-date insights and evidenced thinking from the worldwide advertising industry.

     

    Focusing on advertising expenditure in 96 markets, this latest Global Ad Trends report includes key trends in spending patterns by media and geography since 2009, a round-up of 2017, as well as full-year projections for 2018.

     

    Global growth is forecast at 4.7 per cent to a total of US$572bn this year, boosted by the Pyeong Chang Winter Olympics, FIFA World Cup, US mid-term elections and reduced dollar volatility in emerging markets.

     

    Growth in North America (+5.0 per cent), Asia-Pacific (+6.0 per cent) and Western Europe (+2.6 per cent) is expected to hasten in 2018, while Central and Eastern Europe (+8.4 per cent) and Latin America (+7.0 per cent) will continue to expand at a strong rate. Advertising spend across the Middle East and Africa is expected to dip once more (-4.1 per cent), though at a lesser rate than in previous years.

     

    Global advertising spend rose 3.0 per cent to US$546bn in 2017, according to new projections based on data for 96 markets. The growth rate in 2017 represents a slowdown from the 3.8 per cent rise recorded in 2016, partially owing to weaker growth in the United States (which accounts for 34 per cent of the value of advertising worldwide).

     

    The slowdown in the US contributed to an easing in growth across North America as a whole. Adspend in the region rose 3.3 per cent to US$199.6bn in 2017. Growth in the world’s second-largest ad region, Asia-Pacific, also cooled (+4.3 per cent to US$162.8bn in 2017, as growth in Japan (23 per cent of the regional total) was muted by a weaker Yen. The Chinese ad market – which accounts for 41 per cent of Asian and 12 per cent of global advertising spend – expanded by 4.7 per cent to US$66.7bn last year, propelled by rapidly increasing spend on mobile ads.

     

    Mobile increased its share of global advertising expenditure by an estimated 5.9 percentage points (pp) to 20.6 per cent in 2017, equivalent to US$112bn (up 44.5 per cent year-on-year). Approximately 45 per cent of mobile advertising spend is based in the US, where US$156 dollars per capita is spent on mobile ads.

     

    Mobile is thought to have been the only media channel to have gained share year-on-year. Estimates indicate that mobile overtook desktop internet for the first time in 2017, as spend on desktop ads was thought to have taken a share of 18.3 per cent (down 1.9pp year-on-year).

     

    The largest media channel, TV, is estimated to have registered a 1.4pp dip in 2017, taking a share of 36.5 per cent of the global adspend total (US$199.5bn). Print continues to lose share, the channel was down an estimated 2.2pp in 2017 to 12.5 per cent. Since 2009, print has recorded a massive 21.5pp decrease in its share of global adspend, and has lost an average US$11.5bn each year since 2012.

     

    Out of home’s share dipped by 0.1pp to 5.7 per cent in 2017, while cinema’s share held at 0.7 per cent and radio was down by an estimated 0.2pp to 5.7 per cent.

     

    James McDonald, Data Editor, WARC, says: “2018 should be a stellar year for global advertising, with ad investment set to grow at its strongest rate since the post recovery years of 2010 and 2011. All global regions, with the exception of the Middle East, are expected to register growth, supported by key quadrennial events – notably the Winter Olympics in South Korea, the FIFA World Cup in Russia and the US mid-term elections.”

     

    He added, “Mobile is now a key driver of global growth, and was the only channel to gain share of spend in 2017 – it now accounts for one in five ad dollars worldwide. Nevertheless, traditional media still attract 61% of global ad investment, and TV and out of home will be among the main benefactors of increased brand and political campaign spending this year.”