Global Ad Expenditures Better Than Forecast

By on Sep, 13 2016 with Comments 0

When it comes to global advertising expenditure forecasts through 2018, the world should be saying just one thing: God Bless America.

According to Zenith’s just-released “Advertising Expenditure Forecasts” report, global advertising expenditure will grow 4.4% this year, to $539 billion. That compares to Zenith’s 4.1% growth estimate previously released in June.

Advertising expenditure will then expand by 4.5% in 2017 and 4.6% in 2018 – up from the previous growth forecasts for both years, which were 4.3% and 4.4% respectively.

“This upgrade is mainly the result of stronger-than-expected growth in the U.S., where a strong labor market has encouraged consumers to increase their expenditure, and advertisers have fought harder for their share of the expanding market,” Zenith notes.

By 2018 global advertising expenditure will total 589 billion — $4 billion higher than what Zenith forecast in June.

Pharma, CPG Campaign Fueling The Uptick

Zenith expects network TV to return to 1% growth, after dipping 5% in 2015. That’s thanks to new spending by pharmaceutical and consumer packaged goods companies and a strong upfront, Zenith says.

“We also expect social media to accelerate from 32% growth last year to 35% growth this year, as advertisers take advantage of new formats such as in-feed video and the transition to mobile internet consumption continues,” Zenith says.

As a result, Zenith forecasts U.S. ad spend to grow 4.4% in 2016, compared to its previous forecast of 3.8%.

Zenith OptimediaAlthough the positive “Brexit” vote in the United Kingdom resulted in a sudden shock to global financial markets, far advertisers have reacted calmly, with no widespread budget reductions.

“As we have argued before, most of the impact that ‘Brexit’ will have on the UK ad market will come in the long term,” Zenith opines.

Desktop’s Ad Death Outpacing Print Publications

Desktop advertising peaked in 2014 at $99 billion and was flat in 2015.

As advertisers switch their budgets to mobile, the decline of desktop advertising is expected to gain momentum over the next few years — desktop ad spend will slip 0.8% in 2016, fall 2.9% in 2017 and tumble 7.4% in 2018.

“Between 2015 and 2018 desktop ad spend will shrink by $10.7 billion, more than the other two declining media – newspapers (which will shrink by $9.6 billion) and magazines ($4.4 billion),” Zenith says.

Conversely, mobile ad spend will grow by $81.3 billion over the same period — seven times more than the combined growth of television ($7.3 billion), outdoor ($3.0 billion), radio (nearly flat, at $900 million) and cinema (also statistically flat, at $700 million).

“The global ad market has strengthened over the past few months, thanks mainly to the resilient US consumer,” said Jonathan Barnard, Head of Forecasting at Zenith. “So far any impact from the vote for Brexit has been limited, and confined to the UK. We expect the global ad market to strengthen further in 2017 and 2018.”

Filed Under Adbiz Broadcast News

About The Author: Adam R Jacobson is a veteran radio industry journalist and advertising industry analyst with general, multicultural and Hispanic market expertise. From 1996 to 2006 he served as an editor at Radio & Records.

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