Business News

CCTV 06/12/16


This is the script of CNBC's news report for China's CCTV on December 6, Tuesday.

Welcome to CNBC Business Daily, I'm Qian Chen.

Global advertising spend on social media is set to overtake newspapers in the next four years, according to a report released on Monday.

Social media advertising is growing at 20 percent a year and by 2019 will be worth $50.2 billion compared to $50.7 billion for newspapers, ad agency Zenith said in its "Advertising Expenditure Forecasts" study. But by 2020, the report adds, social media will be "comfortably" ahead.

Advertising on platforms like Facebook and Twitter will account for 20 percent of all internet advertising in 2019, up from 16 percent this year, according to the report.

"Social media platforms have benefited from the rapid adoption of mobile technology, using it to embed themselves into their users' daily lives. For many users, social media is the focal point of their social lives as well as their main source of news. Social media ads blend seamlessly into the news feed, and are much more effective than interruptive banner formats, especially on mobile devices," Zenith's report said.

Online video is another fast-growing area, with ad spend on the format growing 18 percent per year. By 2019, online video advertising expenditure will total $35.4 billion globally, ahead of the $25 billion forecast for radio. Still, online video advertising is nowhere near the size of the TV market.

"Online video is also benefiting from the spread of mobile devices, as well as the development of high-speed mobile data connections and improvements in handset displays. It is becoming common for brands to use online video as a complement to television, but for most it does not make sense to use it as a substitute. Even by 2019 online video advertising will be less than a fifth (18 percent) of the size of television advertising," Zenith noted.

Global media owners' net ad sales are forecast to grow by 3.6 percent in 2017, compared to 5.7 percent in 2016, according to a report by MAGNA, IPG Mediabrands' research arm. The total spent by brands globally on advertising in 2016 was $493 billion.

While 2016 was a bumper year for ad sales in North America, with a $191 billion spend boosted by the Olympic Games and US Election campaigns ($3.5 billion), 2017 will see the region's growth rate slow to 1.8 percent, the most significant market slowdown.

Western Europe will see a noticeable drop in growth in 2017 to 2.4 percent among uncertainty post-Brexit and the general elections in France and Germany.

Asia-Pacific is forecast to see a growth rate of 5.4 percent, which is similar to this year's figure. Meanwhile, Latin America's ad spend is set to grow the most, at 6.2 percent, helped by the 2016 Olympic Games and a general economic recovery.

CNBC Qian Chen, reporting from Singapore.

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