Carat: TV Dollars To See Slow Global Growth
Better-than-expected growth in U.S. advertising market has led Dentsu Aegis Network unit Carat to bump its 2016 ad growth estimate by three-tenths of a point, to 5.0%.
However, Carat lowered its 2017 U.S. ad growth estimates by two-tenths of a point, to 3.8%.
Carat’s updated forecasts for worldwide advertising expenditure, released Sept. 8, illustrate a positive outlook for the global advertising market in both 2016 and 2017. This growth is powered by advertising spend from Search, Display, Online Video, Social Media and Mobile.
Based on data received from 59 markets across the globe, Carat’s latest global forecasts show that planetary advertising spend will reach $548.2 billion in 2016, good for 4.4% year-over-year growth.
Carat cited such “high-interest media events” as the recent UEFA EURO championship, which concluded July 10 with Portugal defeating host France 1-0; the Rio 2016 Olympics and Paralympics; and the 2016 U.S. presidential election.
“The U.S. continues to show positive market confidence,” Carat notes. “The presidential elections alone are expected to generate $7.5 billion of incremental spend.”
Despite “Brexit” concerns, the United Kingdom continues to be the largest advertising market in Western Europe, with positive growth of 5.4% expected in 2016, exceeding the average rate of 2.9% in the region.
Advertising forecasts are also set to remain strong in Latin America, with 10% growth in 2016 in spite of Brazil’s lower expectations.
Meanwhile, Carat said “the positive momentum” of the global advertising spend is expected to continue into 2017, although there will likely be “a slight decline due to volatility in some markets.”
Again, thank digital media for the uptick in global ad dollars, expected to reach $570.4 billion in 2017, for 4% year-on-year growth.
“As the leading media type in 13 of the markets analyzed, digital continues to grow at double-digit prediction levels of 15.6% in 2016, accelerating further at 13.6% in 2017,” Carat finds. “Driven by the high demand of Mobile, Online Video and Social Media, digital media spend is expected to reach 27.7% share of total global media spend in 2016, increasing to a predicted 30.2% in 2017.”
Local and national TV advertising continues to hold the highest share of total global media spend, at 41.1% in 2016. But, it is expected to grow at a more moderate rate of +2.3% in 2017, with a lower predicted share of spend at 40.3%.
Radio is expected to grow by 2.4% year-over-year globally in 2016, with predictions slightly revised downward for 2017.
Driven by the high demand of Mobile, Online Video and Social Media, digital media spend is expected to reach 27.7% share of total global media spend in 2016, increasing to a predicted 30.2% in 2017.
In line with expectations, worldwide magazine and newspaper advertising spend is forecast to continue to decline by 5.5% in 2016, and by 4.3% next year.
“Expanding over three times faster than the global rate, digital reaffirms itself as the unrivaled driver of growth,” says Jerry Buhlmann, CEO of Dentsu Aegis Network. “As the digital economy brings complexity, speed of change and disruption, it is only through digital that brands can build engagement and remain relevant to their audiences on a fully addressable and real-time basis.
“In a world where connectivity and convergence are now the norm, Mobile, Social and Online Video lead the rapid growth of digital investments. With more flexible, targeted and data-led media solutions, Mobile, Social and Video are driving the demand for richer and more powerful consumer engagements, in the right place, at the right time.”