There’s a positive outlook for advertising, except for newspapers and magazines, and digital is forecast to grow by at least 13%.
Global advertising expenditure rose 4.5% in 2016, but is expected to dip to 4.2% in 2017, according to Warc’s latest Consensus Ad Forecast. The report covers 13 markets, all of which are forecast to see adspend increase, although they caution that growth is expected to soften in several markets, including China and the US.
India is forecast to deliver the strongest annual rise in ad spend for 2017 at 13.4% with the three other BRICS markets also expected to post growth. China is expected to lead with 7.1% growth, followed by Russia at 6.1% and Brazil at 2.1%.
“The latest consensus results present a positive outlook for advertising investment at both a global and local level,” said James McDonald, senior research analyst at Warc.
The major media channels are expected to record ad spend growth in 2017, with the exception of newspapers and magazines, according to the report, and Warc predicts mobile to become the third-largest ad channel. TV ad spend growth is expected to ease to 1.1% and internet, which includes mobile ad spend growth, is forecast at 13% growth.
The Carat Adspend Report, published by Carat global media network, shows a positive outlook continuing into 2017, with ad spend expected to reach US$570.4 billion, a 4.0% year-on-year growth, powered by the ongoing growth of digital. The report is based on data from 59 markets across the globe.
High demand for mobile
Carat forecasts double-digit growth for digital at 13.6% in 2017 driven by the high demand of mobile, online video and social media. Digital media spend is predicted to reach 30.2% of total global media spend in 2017.
According to the Carat report, TV will continue to hold the highest share of total media spend in 2017 at 40.3% and print will continue its decline with ad spend expected to be down by 4.3%.
The report confirmed year-on-year growth in 2016 for cinema at 4.5%, radio at 2.4% and OOH at 3.5%, with predictions revised down slightly for 2017.
The report highlights the continued rise of digital as the star performer of global growth. digital spend is expected to grow globally by 13.6% in 2017. In 2016 Digital has shown itself to be the number one ranking media type in 13 out of the 59 markets analysed (Australia, Canada, Denmark, Estonia, France, Hong Kong, Hungary, Ireland, Netherlands, New Zealand, Norway, Sweden and UK). The Czech Republic and Germany are predicted to join this list in 2017, followed by Taiwan and Lithuania in 2018.
Mobile ad spend is forecast to increase globally at 38.9%. This will continue to benefit the leading social channels Facebook, Instagram, YouTube and Twitter which receive the major share of mobile ad spend. Social media ad spend is set to increase globally at a high double digit rate of 28.7% in 2017, while TV ad spend is expected to show 2.3% growth in 2017.
Carat expects paid search spend to grow by 11.6% in 2017 which will see it overtaking newspapers for the first time. Newspapers remain the third largest media category, behind total digital and TV, but the category continues to decline by more than one percentage point each year since 2008, and is predicted to drop to 99% share of spend in 2017.
Slow decline for magazines
Magazines are experiencing a slow decline from a 6.4% share of adspend in 2016 to an expected 6.0% in 2017 and radio is predicted to account for 6.2% share of spend in 2017, with a slow growth rate of 0.6%. OOH is showing relatively strong growth and is predicted to rise 3.4% in 2017 with a 6.8% share of ad spend. Cinema continues to show global growth and is forecast to grow by 4.6% in 2017.
“Carat’s latest forecasts show continued confidence and positive momentum for global advertising spending. Expanding over three times faster than the global rate, digital reaffirms itself as the unrivalled driver of growth. 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,” said Jerry Buhlmann, CEO of Dentsu Aegis Network.
WPP’s GroupM, a leading global media investment management group, predicts 2017 global marketing spend to surpass $1 trillion for the first time, with predicted ad volume of $552 billion (4.3%).
GroupM predicts that the US will be the leading contributor of global ad growth in 2017 now that China has slowed from double digit growth in previous years, to a predicted 7.0% in 2017.
GroupM expects the growth of digital to remain high, but it will moderate from 14% in 2016 to 12% in 2017, accounting for 99% of all net ad growth and one-third of investment for 2017. They expect print to lose the most share to online, while TV will remain resilient.
“The impact of media consumption migrating to digital platforms, and the flow of advertising investment with it, must not be underestimated by advertising clients. This fragmentation of billions of consumer impressions across thousands of platforms demands the use of data and technology to create bespoke and meaningful targeted audiences for brands. This is the transition from media planning to audience planning,” said Dominic Proctor, president, GroupM Global.
This story was first published in The Media Yearbook 2017. A digital version is available here. #TMY2017
