Media Press Release of the Week -3-28-13

GLOBAL INTERNET AD SPEND HIT $99 BILLION IN 2012, ALMOST 20 PERCENT OF TOTAL INVESTMENT

New GroupM Study Predicts This Year’s

Digital Spend Will Exceed $113 Billion

Internet advertising hit $99 billion in 2012, representing a 16.2 percent increase over the previous year and accounting for 19.5 percent of all global measured advertising expenditures, according to a new report from GroupM.

North America led the world in overall digital advertising investment with an estimated $38.3 billion; Asia-Pacific came in second with $30.6 billion followed by Western Europe with $24.1 billion, according to the study, entitled This Year, Next Year: Interaction 2013.

The study is part of GroupM's media and marketing forecasting series drawn from data supplied by parent company WPP's worldwide resources in advertising, public relations, market research, and specialist communications. It was released today by London-based GroupM Futures Director Adam Smith and New York-based Global Chief Digital Officer Rob Norman.

The study also predicted that in 2013 digital advertising spending will reach $113.5 billion globally, 14.6 percent more than 2012. The figure represents more than 21 percent of all measured advertising investment. In the 2013 forecast, North America once again ranks first with an estimated $42.8 billion in digital ad spend; Asia-Pacific follows with $36.8 billion, followed by Western Europe with $26.6 billion.

In the U.S., digital advertising spending reached $35.4 billion in 2012, a 23 percent share of the overall domestic market and a 10 percent increase over the previous year, according to the study. This year those figures are expected to reach $39.7 billion for a 25.4 percent share and a 12 percent increase over 2011.

The report also includes commentary on the current state of various digital marketing developments and offers insightful observations on the evolution of digital communications and the inherent implications for marketers.

“The internet no longer belongs to the old world and eastern Asia, nor does it depend upon evolution of infrastructure conceived a generation or more ago, but instead reaches every continent and economically active individual,” Norman wrote in his introduction to the annual report. “Ken Olsen, founder and CEO of Digital Equipment said in 1977, ‘There is no reason for any individual to have a computer in his home.’ It turns out that he may, inadvertently, have been right. Why have a computer in your home when you can have computing anywhere you like?”

Norman’s essay also addresses the issue of the rise and impact of online video and states: “Tablets created an entirely new and original mechanism of media consumption in less than three years. Tablets combine the display quality of HDTV, the interactivity of the PC and the location awareness, touch interface and app ecosystem of the mobile phone. Media is being re-imagined for the tablet and is increasingly seen as the future home of what we have always described as the print industry, the decline of which is precipitous with ever-fewer exceptions.”

In addition to spending forecasts, the comprehensive, 28-country report also details ad investment in paid search and Internet display, as well as data on broadband penetration, media time spent online and e-commerce per user data.

Additional key findings in the survey include the following:

· The average percentage of consumers’ “media time” spent online has risen from 21 percent in 2007 to a predicted 30 percent in 2013.

· Investment in print media continues to lose share while digital media investment continues to gain. Print accounts for 14 percent of the media day, but still attracts about 24% of investment, down from 48 percent when internet advertising investment measurement began in 1995. The decline of print advertising reflects falling circulations in the old world, but its share of the world's media day has been surprisingly stable, and even increased in 2011, thanks to China.

· E-commerce per user will stand at $859 in 2013, a 64 percent increase since 2007. International e-commerce total adds up to $917 billion for 2012 with a run-rate of growth of 18 percent to a predicted $1.1 billion in 2013. This volume of e-commerce generates an estimated 40 percent of online paid-media ad investment today.

Copies of the full report are available to the media upon request.

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GroupM is the leading global media investment management operation. It serves as the parent company to WPP media agencies including Maxus, MEC, MediaCom, and Mindshare. Our primary purpose is to maximize the performance of WPP’s media communications agencies on behalf of our clients, our shareholders and our people by operating as a parent and collaborator in performance-enhancing activities such as trading, content creation, sports, digital, finance, proprietary tool development and other business-critical capabilities. The agencies that comprise GroupM are all global operations in their own right with leading market positions. The focus of GroupM is the intelligent application of physical and intellectual scale to benefit trading, innovation, and new communication services, to bring competitive advantage to our clients and our companies.