By Kristen Schweizer
Sept. 13 (Bloomberg) -- The Asia-Pacific region will overtake North America as the largest advertising market “soon after 2014,” according to a report.
The economic slowdown accelerated the shift of ad dollars to digital media in China, India and Brazil, eMarketer Inc. and Starcom MediaVest Group said in a joint report. The Middle East and Africa will grow 11.4 percent this year, faster than any other major region, they said.
Increased consumer spending in China and India helped Asia-Pacific fare better in the economic slowdown than the rest of the world. Companies worldwide have been boosting spending after cuts during the economic slowdown and designating more of their budgets to digital media and emerging markets.
“More and more the questions from clients are how to spend on digital and within digital,” said Kate Sirkin, executive vice president and global research director at Starcom MediaVest. “It’s not something that you can just stick a banner ad up and see what happens. You have to engage a consumer and give them an experience online.”
The report predicts Asia-Pacific ad spending will reach $173.2 billion in 2014.
Total global online ad spending will rise 12 percent to $62 billion this year, eMarketer said. By 2014, online will account for 17 percent of total media spending.
The report covers six major regions and 29 countries and includes information from media-buying agencies such as WPP Plc’s Group M and Publicis Group SA’s ZenithOptimedia.
Online Ad Dollars
“Digital always exceeded the growth rate of traditional media,” said Geoff Ramsey, chief executive officer at eMarketer. “We will see in the future, as we do already in the U.K., online encroaching upon television.”
The largest share of online ad dollars, 48 percent, goes to search advertising, followed by display, which includes video advertising, Ramsey said. Video ads are the fastest- growing online format, he said.
Highlights of the 132-page report include:
Online spending in Asia-Pacific in 2014 will account for $22.2 billion, or 22.9 percent of the worldwide total.
North America, the largest ad market in the world, will account for 33.8 percent of the total, or $190.6 billion, in 2014.
Budget Cuts
Though ad budgets were cut in 2009 during the slowdown, consumers in the U.S. and Canada increased their media usage during this time, especially on the Internet and with mobile phones.
Western European ad spending dropped 12.4 percent from 2008 to 2009 and recovery is forecast to be “slow,” the report said. Western Europe’s worldwide market share will decline in the years to come.
Ad spending in eastern and central Europe is forecast to reach $23.1 billion in 2014. While the region now has mobile penetration rates equal to its neighbors in western Europe, Internet usage varies from country to country.
Ad spending in Latin America will increase 9.4 percent this year, the second-fastest after the Middle East and Africa. Total online ad spend in the region will reach $4.2 billion in 2014, from an estimated $2 billion this year.
More than a third of Brazil’s population, 72.2 million, are Internet users and about 186 million people will be mobile- phone subscribers by the end of the year.
The Middle East and Africa has the lowest ad spending worldwide, receiving 2.9 percent of total media expenditure. Still, the $14 billion in spending forecast for this year represents the fastest growth in the world at 11.4 percent.
WPP Plc, the world’s largest advertising company, climbed 0.7 percent to 699.5 pence at 10:28 a.m. in London trading. The stock has climbed 15 percent this year, giving the company a market value of 8.79 billion pounds ($13.6 billion).