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Global adspend forecast to grow 5%

News, 08 December 2014

LONDON: Global adspend is expected to grow 4.9% to $545bn by the end of 2015, rising to 5.6% growth the following year on the back of major events that will take place in 2016, a new industry report has forecast.

According to the latest Advertising Expenditure Forecasts from media agency ZenithOptimedia, the industry will benefit in 2016 from marketing activity surrounding the Summer Olympics, the US presidential elections and the UEFA European football championship.

However, even though the global economy is expected to improve next year, the industry faces a "tough" 2015 in comparison with 2014 when there was a boost from the Winter Olympics, the FIFA World Cup and the US mid-term elections.

As a consequence, ZenithOptimedia has cut the growth forecasts it predicted in its last report published in September. Its forecast for 2015 is now down by 0.4pp and the figure for 2016 is down 0.3pp.

It said this indicated a minor but widespread decline in advertiser confidence, related to conflict in Ukraine and weak economic growth in the core of the Eurozone.

On a more positive note, the report pointed to the ever-important role of mobile advertising and social media as well as noting that the transition to programmatic buying has delivered a boost to traditional display.

Mobile is by some distance the main driver of global adspend growth, the report said, and it is forecast to account for over half (51%) of all new spend between 2014 and 2017.

Global adspend on mobile is estimated at $25.8bn in 2014, representing 5.0% of total adspend, which is expected to rise to $68.2bn by 2017, or 11.3% of all expenditure.

"Mobile technology is creating new opportunities for brands to build relationships with consumers, while programmatic buying is making brand communication cheaper and more effective," said Steve King, global CEO of ZenithOptimedia.

"Social media provides a strong example of how to advertise effectively on mobile platforms, and we expect mobile marketing to develop further as other media learn from this example," he added.

Data sourced from ZenithOptimedia; additional content by Warc staff