Global Advertising Spend Growth to Slow Next Year
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The latest Consensus Ad Forecast from Warc, the marketing intelligence service, indicates that global advertising spend will rise by 4.5% during 2016 as a whole, before the growth rate slows to 4.2% in 2017.
With the exception of newspapers and magazines, all major media channels are expected to record adspend growth this year and next. However, the two largest, TV (+1.1%) and internet (+13.0%) are forecast to see their growth rate ease during 2017. The same is true for mobile, though it is still set to be the fastest-growing ad channel over the period.
Warc’s Consensus Ad Forecast is based on a weighted average of adspend predictions at current prices from ad agencies, media monitoring companies, analysts, Warc’s own team and other industry bodies.
Current sources include Carat, eMarketer, GroupM, Magna Global, Nikkei Advertising Research Institute (NARI), Pitch-Madison, Pivotal Research Group and ZenithOptimedia.
All 13 markets covered in the report are forecast to see the amount invested in advertising rise both this year and next, though for eight of these the growth rate will be softer in 2017.
India is expected to see the strongest annual rise in adspend this year, up 13.3%, with a similar rate of growth anticipated next year. The world’s largest ad market, the US, is expected to post adspend growth of 5.1% this year – buoyed by the presidential election campaigns and the Rio Olympics. US adspend growth is then forecast to cool next year – rising by 2.8% – as the impact of these events is lost.
Adspend growth by country
2016 vs 2015 2017 vs 2016
y-o-y % change y-o-y % change
India 13.3 13.4
China 7.8 7.1
Russia 5.8 6.1
Spain 5.8 5.2
UK 5.6 4.3
US 5.1 2.8
Australia 3.8 3.8
Brazil 3.3 2.1
Italy 2.8 1.6
Germany 2.1 1.8
Canada 2.0 2.4
“India is expected to see the strongest annual rise in adspend this year, up 13.3%, with a similar rate of growth anticipated next year.”
Japan 1.7 1.7
France 1.3 0.8
Global 4.5 4.2
Source: Warc’s Consensus Ad Forecast, November 2016 (www.warc.com)
Despite the uncertainty surrounding the “Brexit” process by which the UK will leave the European Union in 2017, the nation’s ad market is forecast to record adspend growth of 5.6% this year and 4.3% next; both above the global respective rates.
All four BRIC markets, India (+13.4%), China (+7.1%), Russia (+6.1%) and Brazil (+2.1%), are expected to post rises in ad expenditure this year and next. France is forecast to record muted growth of +0.8% in 2017, the softest rate of the 13 markets studied.
All media, barring newspapers and magazines, are predicted to record year-on-year growth in 2017, with mobile expected to see the greatest adspend rise, up 34.2%. Total internet (including mobile) growth is expected to be 13.0% next year, while TV, the world’s largest ad channel by spend, is forecast to post growth of 1.1%.
Global adspend growth by medium
2016 vs 2015 2017 vs 2016
y-o-y % change y-o-y % change
Mobile 47.1 34.2
Internet 14.6 13.0
Out of home 3.4 3.2
Cinema 3.1 5.1
TV 2.8 1.1
Radio 0.4 0.3
Magazines -5.9 -4.5
Newspapers -8.0 -6.1
Source: Warc’s Consensus Ad Forecast, November 2016 (www.warc.com)
James McDonald, Senior Research Analyst at Warc, said: “The latest consensus results present a positive outlook for advertising investment at both a global and local level. All 13 markets studied are expected to record adspend growth in the short term, and this despite their contrasting socio-economic environments.”
“We have identified a common trend among more mature markets whereby increasing investment in internet – particularly mobile – ad formats is driving headline growth. Applying consensus trends to Warc’s adspend data shows that mobile will grow to be the world’s third-largest ad channel by the end of 2016.”
Questions & Answers
Q.Which advertising channels are expected to see a decline in spend during 2017?
Which advertising channels are expected to see a decline in spend during 2017?
Newspapers and magazines are the only major media channels predicted to record a decline in adspend in 2017. Newspapers are forecast to decrease by 6.1%, and magazines by 4.5%.
Q.How do the US and UK adspend growth forecasts for 2017 compare to the global average?
How do the US and UK adspend growth forecasts for 2017 compare to the global average?
The UK is forecast to grow by 4.3% in 2017, which is above the global average of 4.2%. The US is expected to see growth of 2.8%, falling below the global rate for the year.
Q.What is driving the overall advertising growth in more mature markets?
What is driving the overall advertising growth in more mature markets?
In more mature markets, the increasing investment in internet, especially mobile ad formats, is identified as the primary driver of headline growth. Mobile is expected to become the world's third-largest ad channel by the end of 2016.
Q.Which market is predicted to have the slowest adspend growth in 2017?
Which market is predicted to have the slowest adspend growth in 2017?
France is forecast to record the slowest adspend growth among the 13 markets studied for 2017. Its growth rate is predicted to be a muted 0.8%.
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