6magnaMAGNA GLOBAL predicts APAC growth will offset the stagnation in EMEA and North America.

The new MAGNA GLOBAL advertising forecast analyzed media owner ad revenues in 73 markets worldwide.

Key predictions are:

  • MAGNA GLOBAL believes media owners advertising revenues will grow by +3.0% in 2013 and accelerate to +6.1% in 2014 to $515 billion.
  • In 2013, APAC and Latin America growth will offset the stagnation in EMEA and North America. Ad revenues in APAC are set to grow by +7.4% in 2014, which makes a 1.5% increase from 2013.
  • In 2014, US and European markets will benefit from economic recovery and global sports events. China remains a reliable growth engine and Japan makes a surprise return in the growth club.
  • Digital Media will grow by +13.4% in 2013, reaching a 23.3% market share.
  • Social media generated $5.9 billion in advertising revenues in 2012 and the forecast anticipates an impressive 39.6% growth in 2013.
  • Automated “programmatic” buying already represents 17% of online display transaction in the US and up to 30% in some other advanced markets.

The impact of global factors on APAC advertising

According to MAGNA GLOBAL softer economies in the West have hit the Asian economies in terms of exports, but not the investment of global companies in Asia. For instance, even if the car market is tough in Europe, European car manufacturer continue to invest in China because it’s where growth lies for them and they need to build and strengthen their market share there.

Besides, domestic brands are getting bigger and bigger in terms of total ad spend. In China, the top 5 advertisers are Western brands - such as P&G, Unilever, Coca Cola - but the next five are Chinese, including Hangzhou Wahaha, China Mobile etc.

Supported by robust domestic demand, ad expenditure will grow again by 12.1% in 2014 and by 12.6% in 2015 and China will pass Japan to become the 2nd largest media market globally by 2016.

Another “sleeping giant” is waking up in Asia according to the forecast – Japan. Thus, MAGNA GLOBAL revises its ad revenue growth prediction from +0.2% to +1.5% in 2013 and from +2.3% to +2.9% for 2014.

In its new report, MAGNA GLOBAL is also focusing on two major global trends affecting digital media advertising:

Programmatic buying is a method of buying and selling digital display inventory through automated, data-driven platform and, sometimes, through real-time bidding. It is fundamentally allowing the demand side to buy audience for online display and video formats as they buy keyword search. Programmatic transactions continue to grow in the US, commanding an increasingly large share of display advertising revenues.

In 2012, programmatic transactions represented $2.4 billion i.e. 17.4% of total display advertising, and Magma Global expects this to increase to 48% of revenues by 2017. Internationally programmatic buying still lags the US in most markets, but has fewer of the growing pains as many of the technological solutions already exist. Western Europe has seen the most robust international RTB growth, with some markets very advanced such as the Netherlands with 29% of revenues transacted via programmatic methods. Expansion in APAC and South America is still in more nascent stages.

In recent years, social media has really become an integral part of the Internet user’s online experience. Advertisers have only in the past couple of years been able to effectively capitalize on this digital channel and social continues to hold great potential.

Global social advertising revenue is estimated at $5.9bn in 2012, growing 36.8% compared to 2011. In the long-term, social advertising is expected to increase from $8.2bn in 2013 to $22.6bn in 2018, representing a 22.7% CAGR in the next five years. Social Media is a growing segment, representing already 7% of global internet advertising, growing to 11% by 2018.

We‘ve summarized MAGNA GLOBAL‘s growth predictions for the different digital channels in the following table:

Millions of Constant USD

2012

2013

2014

Paid Search

10,804

12,781

14,874

• Annual Growth / Decline

24.6%

18.3%

16.4%

• Share of Total Internet

41.2%

40.9%

40.7%

Online Video

1,911

2,381

2,953

• Annual Growth / Decline

33.3%

24.6%

24.0%

• Share of Total Internet

7.3%

7.6%

8.1%

Mobile (display & search)

2,982

4,332

5,782

• Annual Growth / Decline

53.9%

45.3%

33.5%

• Share of Total Internet

11.4%

13.8%

15.8%

Display (excl. mobile, video)

8,89

9,783

10,588

• Annual Growth / Decline

11.1%

10.0%

8.2%

• Share of Total Internet

33.9%

31.3%

29.0%

Other (non-display)

1,615

2,009

2,368

• Annual Growth / Decline

27.0%

24.3%

17.9%

• Share of Total Internet

6.2%

6.4%

6.5%

Total Internet

26,204

31,286

36,564

• Annual Growth / Decline

22.9%

19.4%

16.9%

• Share of Total Media

18.9%

21.3%

23.2%

of which Social

1,169

1,787

2,602

• Annual Growth / Decline

59.6%

52.9%

45.6%

• Share of Total Internet

4.5%

5.7%

7.1%

By MediaBUZZ