Carat, the leading global media network has published its first forecast for worldwide advertising expenditure in 2017, combined with its latest forecasts for 2016 and actual figures for 2015, showing positive global outlook led by the continued investment in Digital media spending.
Based on data received from 59 markets across Americas, Asia Pacific and EMEA, Carat’s latest global forecasts highlights that advertising spend will reach US$538 billion in 2016, accounting for a +4.5% year-on-year increase. Fuelled by high-interest media events taking place during the year – including the US presidential elections, Rio 2016 Olympics and Paralympics and the UEFA EURO 2016 championship – the positive outlook for 2016 is predicted to continue into 2017, with Carat’s forecast highlighting a consistently strong year-on-year global advertising growth of +4.5%.
Carat’s latest forecasts reconfirm the rise of Digital as the established driver of global advertising spends. Powered by the upsurge of Mobile (+37.9%), Online Video (+34.7%) and Social Media (+29.8%) in 2016, the strength of Digital is expected to continue to grow at double digit prediction levels of +15.0% this year, and a further +13.6% in 2017. Overall, Carat predicts the upsurge of Digital to account for 27.0% of advertising spend in 2016 and extend significantly to 29.3% in 2017, reaching US$161 billion globally.
By media, Digital continues to be the star performer for growth level globally with Hong Kong & Estonia now joining the list of 12 markets where Digital is now the preferred media based on spends. The US, Germany, Taiwan and Austria are predicted to join this list in 2018. Whilst Digital is constantly closing the gap, TV continues to command the majority of market share with a steady 42.0% in 2015 and spend is predicted to grow by +3.1% this year as the Olympic Games and US elections are predicted to generate significant TV viewership across various markets. In addition, Carat’s forecasts reconfirm the steady decline in Print in 2016 and into 2017 with Newspapers declining by -5.4% and Magazines by -1.7% in 2016 whilst highlighting positive year-on-year growth in 2016 for all other media, including Outdoor (+3.4%), Radio (+2.2%) and Cinema (+2.8%), with the latter expected to grow further at +5.0% in 2017.
Key highlights of the report:
i) Sustained growth in global advertising spend predicated in 2017 of +4.5%, in line with continuing global economic growth expectations for next year.
ii) Overall, global advertising spend in 2016 will be supported by general advertising market stability driven by major media events in 2016, including US presidential elections, the Rio 2016 Olympics and Paralympics, and the UEFA EURO 2016 football championship. Total advertising spend is expected to hit US$538 billion this year.
iii) Global forecasts for 2016 have been slightly revised down from the +4.7% previously forecast in the September 2015 report, to +4.5% following changes to regional advertising forecasts in Asia Pacific and Latin America, due to lowered expectations in China and Brazil based on economic conditions.
iv) Advertising spend in North America remains strong with +4.6% expected growth in 2016 fuelled by the upcoming US presidential elections which are solely forecast to generate US$6 billion spend in the US.
v) Western Europe remains stable with year-on-year growth of +2.8% in 2015. Advertising spend in the region is expected to continue to grow consistently at an estimated +3.1% in 2016 and 2017, outpacing predications from the September 2015 report (+2.9% for 2016), mostly driven by growth in the UK and Spain.
vi) Advertising spending in the C&EE region is forecast to return to positive growth in 2016 at +2.2%, revised up from predictions in September 2015 (+1.6%), and a further +4.0% in 2017, mainly driven by increased stabilisation in the Russian advertising market.
vii) In Asia Pacific, the Indian advertising market continues to be buoyant as growth prospects in the country remain high at +12.0% in 2016 and +13.9% in 2017.
viii) Digital media spend continues to grow at double digit prediction levels of +15% in 2016, outpacing Carat's forecasts in September 2015, and a further +13.6% in 2017. Digital media's share of total advertising spend continues to expand year-on-year, targeting a forecast of 27% share in 2016, exceeding earlier predictions in the September 2015 report, and expanding further to 29.3% of total advertising spend in 2017.
ix) The continued growth of Digital is driven by Mobile, Online Video and Social Media, increasingly becoming more prevalent components of advertising investment. Mobile continues to show the highest spend growth across all media in 2016, with a year-on-year estimated increase at +37.9% in 2016.
Unlike growth in the other BRIC markets - Brazil, Russia and China - advertising expenditure in India continues to accelerate. Following a buoyant year in 2015 with a growth of +11.0%, 2016 has begun on a positive note with a forecast growth rate of +12.0%. Growth will be supported by the recently concluded India T20 Cricket World Cup and the state elections. Media-related statistics for India include:
i) TV advertising revenues are forecast to grow by +12.3% in 2016, supported by strong spending from e-commerce companies and FMCG brands.
ii) While TV is expected to remain dominant for many years to come, advertisers are increasingly utilising Online Video as an invaluable complement. However, share of total Digital advertising spend in India is still relatively low at 8.9% (2016).
iii) Unlike in other markets, positive Newspaper advertising spend growth is expected to continue in India at +10.5% in 2016, primarily due to investment from e-commerce, Automotive and a small contribution from Government spending. Retail advertisers also continue to spend on Print.
iv) Carat's first forecasts for 2017 predict continuing strong growth for the advertising market in India with an estimated increase of +13.9% and expected favourable economic conditions in which advertisers vie for consumers' attention.