Internet advertising soars as digital dominates marketing spend

New research from GroupM finds Internet advertising rose to US$99bn in 2012 and will exceed $113bn this year

Global Internet advertising spend is expected to exceed US$113bn (AUD$108.39bn) this year as marketers truly embrace digital as the mainstream channel for communication.

According to a new GroupM study entitled This Year, Next Year: Interaction 2013, Internet advertising spend leapt 16.2 per cent to $99bn in 2012, and accounted for 19.5 per cent of all globally measured total advertising expenditure. Leading the way was North America, with an estimated $38.3bn, followed by Asia-Pacific at $30.6bn.

According to the study, this year’s digital spend will reach $113.5bn, up 14.6 per cent year-on-year, and account for more than 21 per cent of all measured advertising investment. A catalyst for this boost is the rise in consumers’ ’media time’ online, which sat at 21 per cent in 2007 and is predicted to hit 30 per cent in 2013.

“The Internet no longer belongs to the old world and eastern Asia, nor does it depend upon evolution of infrastructure conceived a generation or more ago, but instead reaches every continent and economically active individual,” the report authors stated.

GroupM highlighted the rise of new video distribution channels and YouTube’s ascent as major disruptive forces against the continued dominance of television in terms of viewing and advertising investment. It also pointed out mobile devices are taking video out of the home and office, opening up more screen time for brands to connect with customers.

“Advertising is becoming more separated from the context in which it appears, and increasingly attached to ‘geo-personal’ big data sets that combine place, time and behaviour to increase its relevance,” the report stated.

The authors claimed the sheer growth of smartphone and table penetration will see broadband-capable mobile devices pass PC-based Internet consumption in the next 2-3 years, even in strong PC markets. The resulting rise of ‘second screening’ as a consumer behaviour is a potent opportunity for advertisers and content makers to have deeper interaction through three types of experiences: synchronised, asynchronous and simultaneous.

GroupM also looked into the impact of ecommerce and claimed the rate per user will stand at $859 in 2013, a 64 per cent increase since 2007. International ecommerce was valued at $917bn in 2012 and is predicted to rise to $1.1 trillion this year.

GroupM is a global media investment management group owned by WPP media agencies. The study was based on its media and marketing forecasting series drawn from data supplied by WPP worldwide.

GroupM’s key mobile predictions are:
  • Mobile is a more effective means of adding a valuable service layer to brands than it is as an advertising platform alone;
  • Data from location combined with behaviour will be the best proxy for consumer intent since the typed search query;
  • Mobile search will become the dominant mechanism for commercial discovery where location is a fact in satisfying consumer need, driving great results for advertisers and for Google;
  • Mobile advertising content other than video will need to focus on a call to action if short-term results are expected;
  • Advertisers need to improve mobile-ready assets to leverage the opportunity.

Follow CMO on Twitter: @CMOAustralia

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