Despite challenges to established ad mediums, Canada will maintain its current ranking as the world’s ninth largest advertising market through 2015 according to the latest ad spend report from ZenithOptimedia.
Canadian advertisers are expected to invest US$12.8 billion in paid media advertising in 2015 (all figures in US dollars), up from $11.4 billion in 2012. By comparison, the United States’ projected 2015 ad spend of $182.3 billion is more than that of the next six nations (Japan, China, Germany, the United Kingdom, Brazil and Australia) combined.
ZenithOptimedia projects Canadian ad revenues to grow a modest 2.7% to US$11.3 billion in 2013, with the Internet ($3.4 billion) finally nosing ahead of TV ($3.3 billion) to become the country’s largest ad medium. Mobile investment, meanwhile, is expected to increase 65% as consumers continue to adopt smartphones and tablets, and spend more time with these devices (see the CRTC’s media consumption report below).
While the addition of free newspapers to the ZenithOptimedia tally enabled printed newspapers to record increased revenues of $2.03 billion in 2012, the forecast warns that continued reader migration to digital formats will result in a 10% decline in print revenues over the next three years.
Magazines are similarly under pressure, with circulation down 7% in the first half of the year – that coming on the heels of a 3.5% decline in the last six months of 2012. Nielsen’s LNA tracking indicates that ad revenues were down 4.1% on a year-to-date basis midway through 2013, with ZenithOptimedia projecting they will close out the year “very close” to that. “We expect ongoing erosion of both circulation and total printed publication ad revenues through the forecast period,” said the report.
Out-of-home is expected to finish 2013 with revenues of $492 million (up from $484 million last year) and will benefit from operators’ continued investment in digital inventory over the course of the forecast period. This will fuel growth throughout the forecast period as advertisers capitalize on digital’s creative flexibility and shorter lead times, said the report.
Radio will slightly outpace out-of-home during the forecast period, with ZenithOptimedia predicting that retail spending would be a “main contributor” to modest growth in the recently ended broadcast year and growing momentum in 2014.
In its May renewal of CBC’s English and French TV and radio licenses, the CRTC also approved the public broadcaster’s application to carry advertising on CBC Radio 2 and Espace Musique services, beginning this month (see story below). This advertising will be limited to four minutes per hour.
TV ad investment will remain “soft” through the forecast period, with specialty stations enjoying modest gains and erosion at conventional channels slowing. Broadcast groups continue to adapt their product and agency service models to reflect an ongoing transition to “multi-platform content providers” said ZenithOptimedia, with future ad revenue growth expected to come via digital offerings.
Not surprisingly, the Internet will be the biggest contributor of new advertising dollars to the global market, contributing to 66% of the growth in total expenditure according to ZenithOptimedia. Its share of the global ad spend is expected to increase from 18.3% currently to 24.6% by 2015.
Much of the Internet’s growth will come at the expense of – you guessed it – newspapers. Their share of global ad revenues is expected to fall from 18.7% in 2012 to 14.9% in 2015.
