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Digital leads European adspend growth

News, 18 February 2015

LONDON: Digital and cinema are set to be the fastest growing ad formats in Western Europe in the coming year according to a new report.

The latest Advertising Forecast from Strategy Analytics predicted that total advertising expenditure in the region would increase 3.5% to reach almost €100bn, rather slower than the global growth rate of 5%.

"Western European ad spend growth in 2015 will be solid and unspectacular due to the lack of 'impact' events combined with increased political and economic instability in parts of Eastern and Central Europe," said Strategy Analytics' Michael Goodman, co-author of the report.

"However, it looks better for 2016, a bumper year for ad-stimulating events, with the Olympics and European Football Championships."

Digital is increasing at the quickest rate, as the report projected a 9.3% rise, more than twice that of cinema, the second fastest growing format (+4.3%) and more than three times that of television (+2.7%)

Outdoor and radio were also slated to expand although at a slower rate than the industry average – 2.2% and 1.2% respectively – while print will be the only format to see a year-on-year decline (-1.8%).

Digital is also the biggest ad format in Western Europe, valued at €34bn and accounting for 34% of total advertising expenditure.

Television is in second place with a 30% share, a figure which is significantly below the global average of 39%; in the US, by comparison, television remains the dominant medium, taking a 42% share according to Strategy Analytics.

And while print continues to decline it is still a major player, with a 26% share of all adspend in the region.

Outdoor (6.3%), radio (5%) and cinema (0.7%) make up the remainder.

"Even though TV's share is declining in Western Europe, this is less about ad dollars flowing out of TV and more about dollars flowing into digital from print and radio," said Leika Kawasaki, co-author of the report.

"Therefore, major TV broadcasters across the continent will see little, if any, real decline in revenues, just a shift in the source from linear TV ads to online video.

She added that print's share would decline to 22% by 2018, representing almost half that of a decade earlier.

Data sourced from Strategy Analytics; additional content by Warc staff