India is expected to elbow Canada out of the top 10 in annual ad spend by 2021, according to the latest spend report from Zenith. Canada ranked 10th overall in 2018, with total ad spend of C$13.96 billion (US$10.8 billion).
By 2021 India will have moved up to become the world’s 9th largest ad market, bumping Australia down to 10 and replacing Canada.
Zenith predicts Canadian ad spending to reach C$14.8 billion by 2021, $8.9 billion of which will be directed towards internet advertising. It will be followed by TV (C$3.2 billion), radio (C$1.4 billion), newspapers (C$664 million), out-of-home (C$650 million) and magazines (C$84.5 million).
Globally, Zenith expects global ad spend to grow by 4.8% this year, reaching US$624 billion. It predicts growth of 4.6% in 2020 and 4.1% in 2021, slightly behind GDP growth of 5.7% this year, 5.5% next year and 5.4% in 2021.
North American ad spending is being goosed by what Zenith describes as “a flood of new small and medium-sized companies” that are using Facebook and Google to advertise for the first time. The pace is being set by the U.S., where advertisers currently spend 20 times more than they do in Canada.
Growth at the forecasted rate globally would translate to US$87 billion in new advertising by 2021 (most of which will go to Internet display, see chart right). India is one of six “rising markets”—along with China, Indonesia, Brazil, Russia and South Korea—expected to contribute to a 34% increase in global ad spend in that time. Zenith predicts that rising markets will contribute 50% of additional ad expenditure, while increasing their share of the global ad market from 37% to 38%.
Legal cannabis: I don’t feel anything, do you?
Despite being legalized last year, the report suggests that cannabis has not had a material impact on Canadian advertising revenue. Health Canada has forbidden mass advertising, along with sponsorships, contents, endorsements and promotions associating the substance with attractive lifestyles.
According to Zenith, companies claim they are “abiding by the law as they interpret it,” which has caused Health Canada to issue warnings to several companies regarding illegal advertising.
While noting that TV continues to enjoy mass reach and high consumer influence, Zenith says that both ratings and tuning are “slowly eroding,” particularly among younger demographics—who are turning to streaming services like Netflix, CraveTV and Amazon Prime Video.
It says that broadcasters are increasingly moving away from the old model of guaranteed agency deals based on CPM or CPP, instead adopting what it calls a “fluid, first-come, first-serve” selling strategy.
Zenith says that the advertising ecosystem—and particularly TV—will benefit from the upcoming federal election. The 2015 election added a reported C$68 million in traditional advertising alone, nearly 70% of which was directed towards TV, followed by radio at 18%. The remainder was spread out over out-of-home and print.
But while election advertising will create an influx of incremental revenue, Zenith notes that it will also snatch up available TV inventory, since broadcasters are mandated to accept political ads. That means they will be required to pre-empt previously booked advertising.
Can’t stop the ‘net
The internet surpassed TV as the world’s largest advertising medium in 2017, with Zenith predicting that it will account for 49% of global ad investment by 2021. Its growth has come largely at the expense of print, with newspapers seeing their share of global ad spend plummet from 25% in 2008 to 8% in 2018 and magazines falling from 12% to 4%.
Zenith predicts that newspaper and magazine spending will shrink by 5% and 7% a year respectively over the next two years. However, it does note that its spend figures include only the totals for print, with advertising appearing on their websites, tablets or mobile apps all counted in the internet category. “The performance of print editions does not describe the overall performance of newspaper and magazine publishers,” said the report.
Display is the internet’s fastest-growing sub category—with Zenith predicting 13% growth to 2021—benefitting from the continued transition towards programmatic buying.
Zenith says that TV’s ad share likely peaked at 39.1% in 2012 and has been falling since. Its expected 2021 share of 28.5% will be the lowest since Zenith starting keeping figures in 1980.
Zenith attributes the rapid growth of paid search to TV’s decline. However, taking internet classified and search out of the equation, TV will remain “the principal display medium for many years to come,” said Zenith. TV accounted for 40.4% of all display spending last year, and will attract 36.9% in 2021, said the report.