Ad-spend growth will rise from 3.3% in 2017 to hit 3.9% in 2018 - higher than the 3.6% forecast in January 2018 and taking total investment to US$613.5bn. Global events such as the Winter Olympics & Paralympics, the FIFA World Cup in Russia and US mid-term elections will play an important role in stimulating growth.
Geographically, Asia Pacific and North America are the major growth regions, contributing 41% and 32% of the global increase respectively. Western Europe accounts for 13% with Latin America at 8% and Eastern Europe 5%.
Commenting on the latest forecasts, Jerry Buhlmann, CEO of Dentsu Aegis Network, said: “In the context of synchronised economic growth across the US, Europe and Asia, these figures point to a more positive outlook today than at the beginning of the year and represent a modest but encouraging source of optimism.”
“We are seeing upward revisions in most key markets, with emerging economies such as India showing high rates of growth. The US economy is growing strongly as economic stimulation and tax cuts filter through. Spend in China continues to grow at pace, though driven almost entirely by the ecommerce platforms, Alibaba, Tencent and Baidu.”
“Digital remains the dominant growth area with 25% of global advertising spend expected to be delivered through mobile for the first time. Digital is now the leading form of advertising in 21 out of the 59 markets we track.”
China’s advertising market is predicted to grow 6.5% in 2018, up from the previous forecast of 5.4%, to reach RMB 630 billion – 16.2% of global ad investment. Growth will be driven by digital, which is forecast to command 60% of advertising spend and increase by 14.8%. The online giants Baidu, Alibaba and Tencent (BAT) are projected to contribute around 80% of this growth, underlining their dominance of the marketplace. Mobile payments are also one to watch in the coming years as platforms such as WeChat or Alipay make cash obsolete in large parts of the country.
US advertising spend is forecast to show continued growth in 2018, increasing by 3.4% to reach US$217.3 billion. The Winter Olympics brought in around US$1.6 billion of advertising spend. Local TV is where politicians look to spend, with National TV reaching 90% of the US population. It is predicted that more than US$2.8 billion will be spent on the upcoming mid-term elections. Mobile ad spend is forecast to grow by 21.2% in 2018, revised up from 20.2%, with the majority of spend going towards in-app advertising (80%).
At a time of debate around the UK’s post-Brexit growth prospects investment in the UK advertising market is expected to grow in 2018 by 4.2% to reach £20.4 billion—an upward revision on the 3.8% forecast in our January 2018 report. Q1 revenues out-performed expectations driving optimism of further growth across full-year 2018. TV, Print and Radio revenues are all up vs. turn-of-the-year forecasts, whilst all media channels are looking to exploit this summer’s FIFA World Cup to further drive growth in Q2.
The mobile device is steadily becoming our primary point of access to all digital services and content. In 2018, 52.2% of all worldwide online traffic was generated through mobile phones, up from 50.3% in the previous year, according to Statista. People now spend an unprecedented amount of time on their smartphones—more than five hours a day, according to some estimates. This growth in usage is largely driven by the widespread availability of high-quality digital Video. Mobile Video consumption is exploding among all age groups and content categories. 9 in 10 Social media users opt for mobile browsing, with mobile apps accounting for 70% of time spent on social media.
Reflecting this, mobile is forecast to represent a quarter of global advertising spend (25.2%) this year, exceeding the previous prediction of 24.8%. With new platform such as mobeil payments driving demand, Mobile ad spend is forecast to grow by 23.3% in 2018 and 18.8% in 2019.
Digital still calls the tune
Worldwide Digital media spend is forecast to increase by 12.6% in 2018, more than three times the rate of all media (3.9%), to reach US$230.6 billion—a US$25.7 billion incremental increase year-on-year. Online Video (+24.6%) and Social Media (+21.6%) are particularly strong. Paid Search continues to account for the largest share of digital (39%). As previously predicted, Digital will overtake TV for the first time this year to account for 38.4% share of total ad spend vs. 35.5%. In the US, Digital spend is forecast to overtake TV in 2019. Programmatic ad spend is expected to grow by 23.2% in 2018 and 19.1% in 2019 as the ability to consolidate programmatic buying strategies across formats and devices continues to be an opportunity for advertisers to reach the most valuable audiences at scale.
Traditional media spend is forecast to decline by just -0.5% in 2018 and -0.4% in 2019. Newspapers and magazines are expected to continue their downward trend, with falls of -7.5% and -6.5% respectively. Radio (+2.0%), Out of Home (+2.2%) and Cinema (+5.9%) spend are expected to show steady growth.
TV spend is forecast to move back into growth in 2018 (+1.2%), following a -0.7% decline in 2017, remaining a major medium in the mix with 35.5% of overall investment.