2016 year in review: TV advertising steals the show, but online will catch up soon

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TV was the number one medium globally for advertising revenue, accounting for $192 billion, or 36 per cent, of global revenue of $532 billion. This is according to the figures released by IHS Markit based on the annual Global Advertising Trends report from IHS Technology’s Advertising Intelligence Service.

“Despite the incredible growth of online giants like Facebook, Google and Snapchat, the TV market continues to benefit from big brand budgets,” principal analyst, IHS Technology, Eleni Marouli said. “Quadrennial events such as the Olympics, the European Football Championship and the US elections helped keep TV on top.”

However, revenue from online advertising will overtake TV within the next five years. “In some countries such as the UK, online already accounts for almost 50 per cent of total advertising revenue and will only keep getting stronger” Marouli said.

In 2016, online advertising is estimated to account for almost $160 billion, or 30 per cent of global revenue. Print advertising sits in third with $101 billion, followed by radio with 8.4 per cent of the market and $47 billion in revenue, the report said.

In the US, TV advertising revenue is expected to make up roughly 38 per cent of the country’s total; online is just behind with 36 per cent.

In China, the report expected online advertising revenue to be 17 percent greater than TV advertising revenue, a difference of $15 billion.

Israel, Switzerland and the US top the ad spend per person

The most mature markets are mostly high GDP per capita markets, according to the IHS Technology report. Israel topped the list at $719, followed by Switzerland and the US.

China generated only $65 per person in advertising, despite being the second largest advertising market. Zimbabwe was the last on the list with $0.002 ad revenue per person per year.

Top 10 markets

The top 10 markets make 75 per cent of the global revenue figure. “The top 10 markets still account for the lion’s share of global advertising revenue,” Marouli said. “However, their collective power has dropped due slowdowns in the Chinese and Brazilian economies, which were the rising stars in the top 10 in 2015.”

The top 10 accounted for 76 per cent of global ad revenue in 2015; it dropped to 75 per cent in 2016.

Fastest growing region: Africa

Four out of the five fastest growing countries in 2016 were in Africa. “Ghana and Kenya have been high on the list of many media companies’ expansion plans, and we are seeing growth above 20 percent,” Marouli said. “These markets are still growing from a low base, but the sheer size of their populations means they are becoming interesting targets for big brands.”