Back in May our research showed that the global mobile ad spending market was growing at a CAGR of nearly 40% from 2014-2019 and just last week we forecasted mobile ad spending in the US to increase almost $46 billion by 2019. Major industries like retail, banking, financial services, and insurance are investing heavily in mobile ads, capitalizing on our growing dependence for mobile devices. But television still remains king of the advertising world.
TV ad-spending is the largest segment in the global ad-spending market. Advertisers continue to spend on TV despite the emergence of online platforms because TV is still the most viewed, most influential, and most favoured advertising media in the world. Despite smartphones increasingly diverting the viewer’s attention during the running of advertisements, the global TV ad spending market is forecast to increase by 24.71% and reach $228.23 billion by 2019.
Source: Technavio Research
The spike in 2016 is a result of the Olympics in Brazil as well as the US presidential elections. 66% of homes in the US have televisions and account for 38.04% of the global TV advertising revenue. The global TV ad-spending market is dominated by 10 countries who account for 77.58% of the total market share.
Source: Technavio Research
The global TV ad-spending market can be broken down into six segments: Dynamic Linear TV, Linear TV, Living Room TV, PC, Smartphones and Tablet.
The bulk of TV advertising is generated through the television segments despite the ever-increasing penetration of the Internet, although the marker share is declining. In 2009, television contributed 95% of total ad-spending and the exponential adoption of non TV devices such as PCs, tablets and smartphones have brought that percentage down to 78.49% in 2014. The percentage is forecast to drop to 72.32% in 2019.
Source: Technavio Research
Linear TV is a fast-diminishing segment because the targeting is impersonal and is difficult to sustain considering the current market scenario. Advertising through PC is currently facing portability issues as consumers have adopted smaller handheld devices. Both of these segments will experience negative growth rates going into 2019. However, the Dynamic Linear TV and Living Room TV segments will more than make up for these negative growth rates as both segments are booming.
Dynamic linear TV is expected to grow at a CAGR of 107.27% through 2019, the fastest of any segment. One of the major factors contributing to such growth is the high adoption rate of VoD services and growing sales of IPTV. The scope for advertising is high in the dynamic linear environment as options are customized and advertising reaches the brand’s intended target with high and easy conversion rates. These conversion rates will lead to a $30 billion growth through 2019, cementing the segment as the future of global TV advertising.
