Online advertising to soar in an otherwise flat Irish media market

8 Mar 2019431 Views

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Core predicts that Facebook and YouTube will secure as much as two-thirds of additional online video spend this year.

The online advertising market in Ireland is forecast to rise 6.3pc to €519.5m while print advertising spend is expected to fall by 11.1pc to €106.7m in 2019, according to new estimates from marketing communications firm Core.

Core is forecasting that overall advertising spend in Ireland in 2019 will be a flat affair, with the figure in Ireland expected to grow by just 0.6pc to €1.044bn.

‘In 2019, we still rely on conjecture to estimate the value of the media market in the Republic of Ireland and Northern Ireland’
– ALAN COX

While commentary from the UK suggests that a hard Brexit could result in a 5pc decline in advertising investment there, the Republic of Ireland market is even more exposed, Core warns.

Approximately 25pc of advertising spend in Ireland is allocated from the UK in sterling.

Facebook and Google take the lion’s share of online spend

Despite all the issues surrounding Facebook last year, Core predicts it will continue to increase its share of the online display market from 44pc to 49pc, with revenue totalling €108m. This is driven by an estimated 30pc growth in video revenue at Facebook this year.

Investment in search is expected to grow by 9pc in 2019. This could fuel further inflation, but with Amazon search expected to become available in Ireland late in 2019, costs could drop towards the end of the year. Search advertising will account for more than half of all online media spend in the Republic of Ireland and Northern Ireland.

The online video market in the Republic was worth €77.8m in 2018, representing growth of 29pc on 2017. Core predicted that this year the market will increase by 24pc in the Republic of Ireland to €96.1m, with Facebook and YouTube securing as much as two-thirds of the additional €18.3m spend this year.

Advertising investment across all out-of-home (OOH) formats is expected to increase by 1.8pc in 2019, with revenue of €84.4m, and digital OOH achieving a 25pc share of all OOH spend.

In terms of traditional media, overall print spend in 2018 fell by 10.6pc to €119.9m. Core predicts that the Republic of Ireland print market will contract by 11.1pc in 2019 to €106.7m, with national newspapers falling by 12.0pc to €85.2m.

While television revenue grew by just 1pc to €221.3m in 2018, driven by sponsorship and promotions, TV spend will drop in the Republic of Ireland in 2019, dropping by 2.9pc to €214.9m.

TV remains the medium of choice for brand-building, accounting for one-third of media spend for Ireland’s top 20 advertisers. Core warns, however, that the next few years will be challenging, with modest growth levels as Facebook and Google continue to increase their share of the video market.

In 2018, radio recorded a 4.6pc decline in spend to €117.6m in the Republic of Ireland. Core expects 2019 will be another difficult year for radio, with overall revenue in the Republic falling by 5.5pc to €111.1m.

In the hands of the podcasters

Interestingly, podcast listenership is growing, with 19pc of internet users in the Republic of Ireland listening to this format on a weekly basis, across an increasing array of platforms.

2018 was a tough year for cinema in the Republic, with overall spend falling by almost 5pc to €7.37m. A decline in the alcohol category was the major factor in the decrease. An increase in audiences, coupled with a minimum of four new cinema openings planned this year, should see marginal growth of 0.6pc to €7.41m.

Core CEO Alan Cox said it is vital that an industry-wide approach to reporting real, approved numbers on advertising spend across sectors is established.

“In 2019, we still rely on conjecture to estimate the value of the media market in the Republic of Ireland and Northern Ireland,” he lamented.

“This approach results in very different figures being quoted across the market. This needs to stop; we must agree an industry-wide approach that reports real, approved numbers. To facilitate this, Core has invited the industry’s representative body (IAPI) to establish a committee, with representation from all stakeholders, to manage this project. We are not suggesting that the advertising revenue of each individual media owner be published – that is unnecessary – but what is necessary is an accurate breakdown of total spend by medium.

“An independent third party, such as an accountancy firm, could facilitate this, while protecting the confidentiality of company-level information. A similar process is already in place for TV (managed by TAM Ireland), which employs a third party to establish an accurate commercial revenue number for TV (as a whole) from individual spends supplied by each.”

In a bid to ensure that Ireland has a sustainable media market for the future, Core is also calling on the Government to commission an independent report to examine the state of the news media in Ireland, the threats of the financial stability of publishers, the impact of search engines and social media platforms, and the role of digital advertising.

John Kennedy is an award-winning technology journalist who served as editor of Siliconrepublic.com for 17 years.

editorial@siliconrepublic.com