Google’s share of the Internet ad market has risen almost 10 percent in the last five years, from 34.9 percent in 2006 to 44.1 percent in 2010, making it the undisputed Goliath in online advertising. Google also dominates global search, accounting for 85 percent of all searches as their three main competitors, Microsoft, Yahoo, and AOL, have slipped to just a 13.8 percent share combined, according to advertising and communications firm ZenithOptimedia.
As Google continues to grow, thanks to acquisitions like DoubleClick and YouTube, Facebook has also increased their market share, though it is more at the expense of companies like Microsoft and AOL. Facebook’s 0.6 percent 2006 market share had grown to 3.1 percent in 2010; ZenithOptimedia expects they will surpass Microsoft by the end of this year. They doubled AOL during 2010.
In times of persistent economic uncertainty, it wouldn’t be difficult to take a pessimistic view in predicting expenditures in the coming year and beyond. Yet despite the European slowdown and the very real possibility of further debt crisis, ZenithOptimedia predicts sustained growth in global ad spend, at least until 2014.
They credit the quadrennial effect – events occurring every four years – as growth drivers in 2012, as the summer Olympics, U.S. Presidential elections, European Footballl Championship, and other major events come around. The second major contributing factor is Japan’s continued recovery from the devastating 2011 earthquake and tsunami. Together, they say, these two events will pump an additional $7 billion U.S. into global ad expenditure.
Actual ad expenditure growth in Japan is predicted at 3.1 percent next year, as they play catch up following several weeks of severely disrupted media and advertising. They do expect growth to settle to 1.9 and 2.5 percent in 2014 and 2015, respectively.
Asia Pacific (excluding Japan), Central & Eastern Europe, and Latin America will grow between 7 and 10.4 percent. The Middle East and Africa, however, slowed by political turmoil causing media production and distribution disturbances, is expected to increase only 1.3 percent, on average.
Between 2011 and 2014, ZenithOptimedia predicts that 58 percent of new ad dollars will come from emerging markets such as China, Russia, and Indonesia. Developing markets, which they define as everywhere outside of North America, Japan, and Western Europe, will increase their share of the global ad market from 32.3 percent in 2011 to 35.9 percent in 2014.
Within the Internet advertising segment, paid search accounts for almost half of all ad spend, though its growth, at 15.7 percent a year, is slowed by the move to mobile, where costs are lower. Display is a close second, with a larger rate of growth, at 18.9 percent per year. They expect display to continue trailing paid search slightly into 2014, taking 22.6 and 25.6 percent, respectively.
Over the next three years, they say, 48 percent of all global ad expenditure growth will come from 10 developing markets, with Brazil, Russia, India, and China combined accounting for 33 percent. Currently, China and Brazil are the only two developing markets on the top ten list for total ad spend; by 2014, Russia will join them, bumping Italy off the list.
By 2014, they forecast a greater piece of the total ad spend market share pie for Internet advertising, increasing to 21.2 percent. Currently, there are four markets in which Internet advertising accounts for more than 25% of total spend: Denmark, Norway, Sweden, and the UK. In 2014, Internet advertising as a portion of total spend will top 30 percent in Canada, Norway, Sweden, and the UK.