LONDON: Adspend in leading emerging markets is expected to grow almost four times as fast as that in developed markets over the next three years and over the longer term will add $200bn to the global total, according to new research.
A report from S&P Capital IQ
Equity Research, an investment research firm, forecast that advertising expenditure in Brazil, Russia and China will grow at an average of 10.7% a year compared to just 2.8% for seven developed markets considered.
In all, these three countries are predicted to account for 29% of global advertising growth and S&P Capital IQ projected that emerging markets would add $200bn to global adspend over the next 10-15 years.
"One of the greatest long-term investment strengths of global advertising agencies is their increasing exposure to emerging markets where growth rates are poised to remain higher than the developed world," said Alex Wisch, an equity research analyst at S&P Capital IQ.
He cited Brazil as an example: "It is set to host the 2014 Football World Cup, followed by the 2016 Olympic Games, assuming a prominence on the world stage and becoming a focal point for many marketers accordingly."
Another factor working in favour of global agencies was that they had "already developed a solid foundation in the BRICs, so the heavy lifting on the investment ramp is largely behind them," noted Wisch.
In the rest of the world, S&P Capital IQ thought advertising budgets in North America would grow as economic recovery there continued more strongly than expected, but in Europe it felt there was "further scope for disappointment".
Warc's recent International Ad Forecast
also pointed to BRIC countries as drivers of growth and observed that while overall adspend would slow in 2013 because of the lack of major global events, it would pick up again in 2014.
Data sourced from S&P Capital IQ; additional content by Warc staff