Why is e-commerce advertising just starting?

The Zenith group of agencies presented the most important figures of the advertising market for the coming year. It is clear that live image advertising and paid search are driving the growth of global advertising. Advertisers are now well positioned to use channels in a precise and personalized way, thanks to appropriate automation. As part of the advertising spending forecast released today, Zenith expects online video advertising to increase by an average of 18% per year between 2018 and 2021, twice as fast as other forms of advertising on the Internet. Web.

Paid search is not progressing as fast, but at least it is growing at an average annual rate of seven percent. In the future, this will make more efficient AI and machine learning technologies, better tracking of localization, integration with retailers and the emergence of research. "in the moment" from advertisers. According to forecasts, online video advertising is expected to increase by $ 20 billion between 2018 and 2021 and research paid $ 22 billion. As a result, both channels will account for 60% of the growth in the global advertising market by 2021.

Online Advertising: From China to the World

A trend that is currently booming, especially in China (where it is mainly related to the two major electronic commerce networks Alibaba and Tencent), but also in Europe (especially by Amazon), is e-commerce. Advertising, advertising that is next to and in the search results and product listings on e-commerce sites. Zenith believes that this form of advertising has considerable potential in online conversions and will bring in about $ 100 billion of additional investment in the global advertising market.

The role this already plays in China indicates a number: the market share of online advertising in e-commerce has increased from 0.8% in 2009 to around 18.2% this year, thanks to corporate investments such as Alibaba, use e-commerce as a source of advertising revenue. Until recently, e-commerce platforms outside China focused mainly on direct sales to consumers. This has gone beyond the advertising industry, but is changing now. In total, Amazon generated advertising revenue of almost $ 5 billion in 2017 and, in the third quarter of 2018, advertising revenue increased 122% year-over-year. Other online platforms follow this example and invest in their own advertising opportunities.

Platform advertising as a more direct customer approach

According to the authors of the study, advertising in e-commerce is at the level of China at the end of the last decade. If e-commerce follows a similar course worldwide, it is expected to account for 18% of the global advertising market by 2027. This is a tremendous revenue opportunity for online and offline platforms. a whole new way for brands to reach their customers when they buy – and most importantly, an ATM machine for Amazon, the largest player in our markets.

Overall, Zenith expects global advertising spend to increase 4.5% by the end of the year. Central and Eastern Europe will be the region with the fastest growth, with an average growth of 6.3% per year between 2018 and 2021, driven by the persistent strength of Russia. In second place comes the Asia-Pacific region with an average growth of 4.9% per year or 5.7% per year excluding Japan. Emerging advertising markets such as India are playing an increasingly important role in the global growth of advertising investments. In contrast, industrialized countries or established markets such as North America, Western Europe and Japan account for 62% of the global advertising market this year, up from 75% ten years ago.

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