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Warc cuts 2015 adspend forecast

News, 10 December 2014

LONDON: Global advertising spend will increase by 4.8% in 2015 according to Warc's latest International Ad Forecast which has downgraded forecasts for all countries considered except India and the UK.

The total market, which covers 12 countries, has been revised downwards by 0.5 percentage points from Warc's June forecast thanks to a combination of factors, including risks to global economic growth presented by further stagnation in the eurozone, slowing growth in parts of Asia and tension surrounding Ukraine.

The last of these is a contributing factor in the reappraisal of the Russian market, which had started 2014 brightly with the Sochi Winter Olympics. Economic difficulties have since grown on the back of political uncertainty, the falling price of oil and a devalued ruble. The forecast for 2015 has been slashed by 7.2 percentage points to just 2.0%. When considered at constant 2005 prices that equates to a 4.1% decline.

The biggest increases in adspend in 2015 are predicted to come in India (15.1%) and China (10.5%). For the latter, however, there has been a cut of 0.5 percentage points in Warc's forecast, while the former has been revised upwards by 1.6 percentage points on the back of an optimistic economic outlook following this year's general election.

Brazil, the last member of the BRIC community, has also experienced deteriorating economic conditions, and adspend there is now forecast to grow at 3.7% in 2015, a reduction of 4.3 percentage points on the June figure.

The UK is expected to be the third fastest growing market at 6.9%, unchanged from earlier forecasts. Those for the remaining seven countries considered have all been revised downwards slightly, from -0.1 percentage points in the case of the US to -1.0 in the case of Australia.

Looking to the long term, the shift in spend away from traditional channels and towards internet continues. Internet will account for over a third of global adspend next year, up from 9.2% in 2006. By contrast, spend across print media more than halved. Only TV has remained strong over the decade [for traditional media], and is set to remain the largest adspend channel in 2015, taking a global share of 37.1%, up from 35.7% in 2006.

Suzy Young, Data and Journals Director at Warc, commented: "The outlook for adspend is mixed in 2015, with some markets predicted to see significant growth – while growth in others remains muted. Most advertising dollars will still be spent in mature markets – high annual growth rates in emerging markets notwithstanding. For example, while the Indian ad market is expected to grow rapidly, at an estimated US$6.2bn it will still only achieve a 1.5% market share."

Data sourced from Warc