GLOBAL: Major sporting events and political campaign spending are expected to underpin growth of 4.7% in the global ad market – the strongest rate since 2011 – as the PyeongChang Winter Olympics and Russia World Cup help push marketing spend to a total of $572bn in the coming year.
This is according to WARC’s January Global Ad Trends report, which analyses key trends in historic spending patterns among media in 96 markets, and provides predictions for the year ahead.
2018’s growth forecast is a marked increase on 2017’s 3.0% expansion (to $546bn). A slowdown from 2016’s 3.8% rise, last year was stymied by weaker growth (3.3%, down from 8.5% the year before) in the world’s largest advertising market, the United States, which accounts for 34% of the global total.
Growth was more sluggish in Western Europe – a fifth of the global ad market – as adspend ($110bn) growth matched the 0.2% rise recorded in 2016.
Asia-Pacific’s growth also cooled in 2017, in part due to a weaker Yen dampening Japanese adspend, which accounts for 23% of the region’s total. China, meanwhile, expanded by 4.7% to $67bn thanks to the increasing popularity of mobile ads.
Elsewhere, the report finds that Central and Eastern Europe was the fastest-growing region in 2017, with spend rising 14.5%. Latin America also grew (+9.4%) following a decline in the previous year. The Middle East and Africa, however, recorded a second year of double-digit decline (-10.5% in 2017; -11.3% in 2016).
The year ahead looks brighter for all regions. Growth in North America (+5.0%), Asia-Pacific (+6.0%) and Western Europe (+2.6%) is expected to accelerate in 2018, while Central and Eastern Europe (+8.4%) and Latin America (+7.0%) will continue to expand at a strong rate.
Mobile advertising has emerged as an engine of growth. It was the only medium to gain share of global advertising spend last year, becoming the second-largest ad channel with 20.6% ($112bn) of global ad investment. Mobile spend is expected to rise 32% to $149bn this year.
“2018 should be a stellar year for global advertising, with ad investment set to grow at its strongest level since the post recovery years of 2010 and 2011” said James McDonald, Data Editor at WARC and author of the research.
“All global regions, with the exception of the Middle East, are expected to register growth, supported by key quadrennial events - notably the Winter Olympics in South Korea, the FIFA World Cup in Russia and the US mid-term elections.”
The largest media channel, TV, is estimated to have dipped slightly to 36.5% share in 2017; despite this it continues to draw more spend than the duopoly of Facebook and Google. More broadly, the report shows that 61% of global advertising spend remains in traditional media channels.
"Mobile is now a key driver of global growth," McDonald added, "and was the only channel to gain share of spend in 2017 – it now accounts for one in five ad dollars worldwide.
"Nevertheless, traditional media still attract the majority of global ad investment, and TV and out of home will be among the main benefactors of increased brand and political campaign spending this year.”
Sourced from WARC