Display To Eclipse Paid Search Ad Spend In 2016, Mobile Set To Become 4th-Largest Ad Medium

Spending on display advertising will soon overtake paid search. That’s according to ZenithOptimedia’s latest global advertising forecast.

With display advertising growing at 21 percent a year, it’s expected to hit $74.4 billion in 2016. While paid search, which is experiencing 13 percent annual growth, is estimated to come in at $71 billion at that time.

Zenith expects search to keep dominating this year, however, with search spend projected at $55.7 billion versus $ 51.8 billion for display.

Programmatic buying is boosting the pace of expansion of display advertising, now the fastest growing segment of online advertising. Ad tech’s influence can be seen as companies vie for a piece of the RTB pie and build their own real-time bidding exchanges to allow advertisers to automatically bid on ad inventory based on detailed placement and visitor specifications.

Social media and online video are also reaping benefits from programmatic. Advertising on social media (led by Facebook and Twitter) is growing at 29 percent a year, while online video is pacing a bit slower at 23 percent annual growth.

Mobile To Outperform Radio, Outdoor, Magazines

No surprise, mobile’s importance to the advertising ecosystem continues to rise. Mobile is growing six times faster than desktop internet advertising as smartphone and tablet adoption spreads. Desktop is still growing, just at a snail’s pace of 8 percent a year compared to mobile, which is expected to see average annual growth of 50 percent between 2013 and 2016.

Globally, mobile advertising is estimated to have hit $13.4 billion last year, that’s 12.9 percent of the online ad market and 2.7 percent of the overall media spend. Factor in 50 percent growth, and Zenith predicts mobile advertising will top $45 billion by 2016 and account for 28 percent of online ad spend and 7.6 percent of the all advertising expenditures to become the fourth-largest medium ahead of radio, magazines and outdoor. Note that mobile includes all online advertising on smartphones and tablets including in-app, search, display and more.

On the whole, the internet continues to be the fastest growing category in advertising — by a long shot. The online advertising market grew 16.2 percent in 2013, and Zenith predicts the upward trajectory will continue at an average of 16 percent annually between 2014 and 2016.