TV advertising losing market share to internet

TV continues to take the largest share of TV advertising revenue by medium, but the proportion it commands has peaked because of the speed of growth in Internet advertising, according to media buyer ZenithOptimedia.

ZenithOptimedia says that TV share of the overall advertising market peaked last year when it accounted for 39.6% of all ad spend. That share will fall to 39.4% this year and 38.3% by 2016.

“This is not because advertisers are withdrawing from television – far from it, we expect television adspend to rise at an average of 4.4% a year to 2016,” ZenithOptimedia noted. “But internet advertising is growing so much faster – at 16.2% a year – partly because it now offers credible brand-building alternatives to television.”

TV will enjoy a global ad revenue boost from the ongoing World Cup with growth of 5.4% this year compared with 3.9% in 2013. ZenithOptimedia is forecasting stronger growth in 2015 and 2016, of 5.7% and 6.1% respectively, as economies in the Eurozone countries recover.

ZenithOptimedia CEO, Steve King said: “While television will remain central to how fans experience the [World Cup] competition, advertisers are using digital media more than ever before to help shape this experience. Over the next few years internet advertising will play an even greater role in supplementing the brand-building power of television.”

However, ZenithOptimedia has downgraded its forecasts for the Central and Eastern Europe region as the Ukraine conflict weighs on commercial activity in the country and in Russia. Ad spend in Ukraine will shrink by an estimated 32.5% and in Russia growth forecasts have been scaled back from 9% to 6.9%.