LONDON–(BUSINESS WIRE)–By 2020, more than three-quarters of all online display advertisingrevenue will come from mobile, according to newanalysis released today by IHS Markit (Nasdaq: INFO), a world leaderin critical information, analytics and solutions.
“Mobile advertising has grown stronger than any other medium in the lastfour years, and now accounts for a significant proportion of onlineadvertising revenue,” said QingzhenChen, senior analyst at IHS Markit.
Global mobile display advertising surged 72 percent in 2015 compared tothe previous year, and accounted for 45 percent of all online displayadvertising revenue, with a total of €29 billion.
In 2016, worldwide mobile advertising will grow 42 percent, to $41billion and for the first time will generate more than half—55percent—of all online display advertising revenue, said the latest IHSMarkit white paper.
Regional highlights: China
China has maintained its growth momentum despite economic restructuring,but the real growth engine comes from online. With roughly $33 billionin revenue for 2016, the Chinese online advertising market is the secondlargest in the world. Online grew 17.5 percent in 2016 and will grow 14percent in 2017, driven by a strong growth of online video (51 percentand 32 percent growth, respectively).
“In 2016, the Chinese online ad market went through some turbulence andreshuffling,” Chen said. “China introduced its first set of onlineadvertising regulations, which in the short term had reduced onlineadvertising revenue, but in the long term, we expect to see a moresustainable online ad ecosystem from this development.”
On the other hand, after a period of rapid growth, TV has entered athird year of consecutive decline with a single-digit contraction. Manypeople are switching to online for content consumption and seeking widerrange of content, from foreign content to user-generated content bypopular vloggers. TV in China declined 2.7 percent in 2016, and IHSMarkit expects a 3 percent drop in 2017.
Baidu, Alibaba and Tencent — known collectively as the B.A.T. in China–own 36.5 percent of the total ad market with a total of CNY 160billion ($24 billion) in 2016. “The trio has absorbed large TV brandbudgets and online ad budgets, and continues to expand aggressively intodigital,” Chen said.
The trio made a total of 262 investments, 27 acquisitions and one jointventure between 2009 and 2016. Mobile app companies received mostinvestments from the trio for that period.
“As Chinese companies go global, investments in nearby countries willincrease,” Chen said. “Regions like Southeast Asia are benefiting fromthe rise of a middle class, consumerism, and a mobile-first youngpopulation. The emerging Asian markets present a huge businessopportunity for the trio to export its video content, games ande-commerce abroad.”
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About IHS Markit (www.ihsmarkit.com)
IHS Markit (Nasdaq: INFO) is a world leader in critical information,analytics and solutions for the major industries and markets that driveeconomies worldwide. The company delivers next-generation information,analytics and solutions to customers in business, finance andgovernment, improving their operational efficiency and providing deepinsights that lead to well-informed, confident decisions. IHS Markit hasmore than 50,000 key business and government customers, including 85percent of the Fortune Global 500 and the world’s leading financialinstitutions. Headquartered in London, IHS Markit is committed tosustainable, profitable growth.
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