Adspend growth to slow to lowest level since global recession, IPG forecasts

Next year's global adspend growth will slow to its lowest rate in 15 years outside of the 2008/09 recession, according to latest forecasts by IPG Mediabrands' Magna researchers.

Donald Trump: the president-elect will begin his tenure in January
Donald Trump: the president-elect will begin his tenure in January

Global ad growth will slow noticeably next year to 3.6%, today’s report said, due to the lack of cyclical advertising events as well as uncertainty surrounding the UK’s Brexit vote, Donald Trump becoming US president, and general elections in Germany and France.

It contrasts with forecasts released today by Publicis Groupe's Zenith and WPP's Group M, which have predicted 4.4% global growth next year.

Magna expects linear TV and radio ad sales to be marginally contract next year (-0.1% and -0.9% respectively), while print ad sales will continue to decline by 9%. Digital media sales will grow by double digits next year (13%), while out-of-home is forecast to grow by 3.7%.

For 2016, digital media is driving global ad sales growth to 5.7%, its strongest lift in six years. Linear television ad sales were "resilient" this year, Magna’s report said, and grew nearly 4% to $186bn (£146bn), but will be virtually flat next year at -0.1%. 

Meanwhile, digital ad sales grew by 17% to $178bn, while offline media sales (including linear TV, radio, print and out-of-home), were down 0.3% at $315bn. Without the big events that benefit TV, such as the Olympics and US elections, traditional media would have been down by 2%.

Vincent Létang, executive vice-president of global market intelligence at Magna who authored the report, said: "Advertising sales were strong overall in 2016 and North America was the most dynamic region.

"The resurgence of television (+4%) did not come at the expense of digital (+17%). Both grew strongly this year because advertisers are funding social spend (+46%) and search spend (+17%) by reallocating below-the-line offline marketing budgets more than traditional branding mass media.

"At the same time, they had to face significant cost increases in television to maintain their share of voice and reach."

Subscribe to Campaign from just £57 per quarter

Includes the weekly magazine and quarterly Campaign IQ, plus unrestricted online access.

SUBSCRIBE

Looking for a new job?

Get the latest creative jobs in advertising, media, marketing and digital delivered directly to your inbox each day.

Create an Alert Now
Share

1 Vodafone, Sky and HSBC join retreat from Google

Several more major brands, including Vodafone, Sky, and a trio of the UK's leading banks, have added their names to the list of those considering suspending their advertising on Google.

Why Cosabella replaced its agency with AI and will never go back to humans
Shares0
Share

1 Why Cosabella replaced its agency with AI and will never go back to humans

In October, lingerie retailer Cosabella replaced its digital agency with an AI platform named "Albert". Since then it has more than tripled its ROI and increased its customer base by 30%.

Just published

More