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Breakthroughs that will shape the future of the global product promotion industry

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Global Advertising Industry Statistics

The global advertising industry witnessed 6% growth in 2010, bringing the sector’s worth to almost $87 billion. MarketLine predicts the industry will climb to more than $113 billion by 2015, representing 30% expansion over five years. Food, beverage and personal care represent the leading segment in the advertising sector, contributing over a quarter of total industry revenue. The Americas dominate the global sector, with more than 42% of the market revenue.

Players in the industry use communication as a tool to influence consumer behavior and promote companies, services and products. An array of media is available to advertisers to get their message across, including mainstream media such as TV and radio as well as direct mail, mobile ads and blogs.

Key Market Segments

The world online advertising industry is expected to reach almost $73 billion by 2015, according to research from Global Industry Analysts. Industry performance is expected to be fuelled by an expanding internet user base worldwide. After a decline in 2009 due to the economic recession, the online advertising sector regained its footing in 2010 and has witnessed steady growth since.

TechNavio predicts the global mobile advertising industry will record 57% growth between 2011 and 2015. Widespread adoption of smartphones continues to drive growth in this sector. Players operating in this sector have been turning to acquisitions and partnerships to remain competitive. Leading industry players currently active in the global mobile advertising market include Google, Yahoo, Microsoft and Apple.

Revenue generated by advertising agencies has been falling, with growth slowed by shrinking corporate promotion budgets and changes in media consumption. IBISWorld predicts there will be a turnaround in the industry in coming years. Agencies are keeping up with the times, adapting to changes in consumer behavior and blending traditional media advertising with newer forms of media promotions.

Direct mail advertising has fared the economic downturn well as companies have opted for the cheaper solution of direct mail ads rather than more expensive mainstream media such as TV and radio. IBISWorld foresees a shift back to mainstream media over the coming years. This will fuel competition within the direct mail advertising industry, with digital advertising in particular coming to the front as companies opt increasingly for internet and mobile messaging. Direct mail advertisers distribute advertising materials such as flyers and coupons and promotional items like pens and key chains.

The video advertising network industry (including exchanges, DSPs, SSPs, RTBs, auctions and serving platforms) is expected to exceed $8 billion in 2012, according to research conducted by Accustream. Video formats alone represent more than three quarters of the industry, generating in excess of $6 billion in 2012. Auctions and exchanges should represent less than 7% of overall revenue in 2012, with trafficking platforms exceeding $5.5 billion. Total revenue for integrated monetization platforms in 2012 should reach almost $2 billion. This market has witnessed close to 54% growth over the past five years, and is expected to expand by 49% before the end of 2014.

Regional Market Share

The US advertising industry witnessed a 1% increase in expenditures in the second quarter of 2012 to exceed $34 billion, reports strategic marketing information provider Kantar Media. In the first half, spending rose 2% to exceed $67 billion. TV spending continued to dominate the advertising market, growing 4.5% in the second quarter of 2012. Cable TV expenditures climbed more than 4%, with sports programming and other large audience networks fuelling growth.

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