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Brands not moving advertising spend away from digital: Zenith

Media agency Zenith has released a report which dispels the belief advertisers are moving their money away from digital.

The Zenith Advertising Expenditure Forecasts said there is no evidence global advertisers are shifting budgets away from digital, while locally ad spend is being fuelled by strong online classifieds and marginal growth in metro TV.

Zenith’s report takes six independent studies on brand growth – Millward Brown Brandz, Seigel & Gale Brand Simplicity Index, Interbrand Top 100, NetBase Brand Love study, Brand Finance Top 500, and the European Brand Institute’s Top 100 – and combines them into a single index of growth. The new ranking is then correlated with financial performance, media activity, digital activity, and the performance of owned and earned content.

The study projected Australian ad spend will rise 2.6% to $16bn this year, with the global market surging ahead of the local market and climbing 4.6%.

Digital, the report said, is continuing to grow, despite brand safety concerns and recent data scandals.

In the US, online advertising grew by 13.7% in 2017 to US$204bn. In three markets – China, Sweden and the UK – online advertising accounted for more than 55% of ad spend.

The Zenith Advertising Expenditure Forecasts said advertisers will spend 40.2% of their budgets on online advertising this year, up from 37.6% last year and 34.3% in 2016. The report forecasts it will reach 44.6% by 2020.

Zenith said the growth in online ad spend is part of the wider process of digital transformation, as advertisers invest in technology, data and innovation.

“We are observing sustained ROI from digital transformation,” Zenith’s global brand president Vittorio Bonori said. “And we are now at the forefront of a transformation as brands shift budgets along the consumer journey, benefit from powerful algorithms and advanced machine-learning techniques, and invest in new e-commerce solutions. This transformation is at the hear of driving brand growth.”

Local Zenith CEO Nickie Scriven, said Australia was slightly behind the global growth trend.

“In Australia, our ad spend growth is slower and fuelled by strong online classifieds and some marginal growth in metro TV during the pre-Christmas retail period. In addition, digital and out-of-home continue to enjoy growth ahead of the market, however the rate of growth of digital out-of-home is starting to slow,” she said.

“Among advertisers, automotive and retail continue to drive growth, while government and food/produce.daily have had the largest declines in volume.”

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