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Global adspend forecasts cut

News, 24 September 2015

GLOBAL: Expectations for global adspend growth have diminished since January, with the latest Consensus Ad Forecast from Warc for this year and next down 1.3 and 1.4 percentage points respectively.

Warc's Consensus Ad Forecast is based on a weighted average of adspend predictions at current prices, for 13 countries, from ad agencies, media monitoring companies, analysts, Warc's own team and other industry bodies.

A 3.8% rise is now predicted for 2015 rather than the 5.1% projected at the start of the year. And in 2016, growth has been revised down from 6.0% to 4.6%.

India is expected to see the strongest annual rise in adspend this year, by 13.4%, although this marks a minor downgrade of 0.2pp from January. The largest single downgrade was for Russia, by a substantial 15.0pp. Analysts now forecast a 13.6% contraction in the country's ad market following economic hardship brought about by the low price of oil and decreased consumer spending.

The remaining BRIC markets, China (+7.8%) and Brazil (+5.6%), have also seen downward revisions since January – of 2.5pp and 1.5pp respectively – owing to challenging economic conditions.

"The latest consensus results demonstrate just how quickly economic tides can turn, especially among emerging markets," noted James McDonald, research analyst at Warc.

"Yet despite the more challenging conditions, adspend growth is still widely anticipated this year and next, a fact which demonstrates the robust nature of the advertising industry at large," he added.

The world's largest advertising market has seen a downgrade in growth expectations this year, by over half a percent (0.6pp) to 2.9%, as the TV sector in the US performed less strongly than expected.

In Europe, Spain registered the largest upward revision – 2.3pp to 6.8% – while the UK saw a more modest upgrade of 0.8pp to 6.5% after a strong start to the year.

All media, barring newspapers and magazines, are predicted to record year-on-year growth in 2015, with internet expected to see the greatest adspend rise, up 17.1% after a +1.1pp revision.

"It is interesting to note that, despite more muted expectations for other media, experts have actually raised their forecasts for online adspend growth over the course of this year," said McDonald.

"With over US$130bn spent on digital ads worldwide last year, 17.1% growth in 2015 would highlight marketers' increasing regard for the medium, with the adoption of mobile and video formats, in particular, growing exponentially."

Data sourced from Warc