Group M: no Brexit or Trump effect yet on adspend

WPP's Group M predicts global adspend to grow by 4.4% to $547bn (£431bn), despite economic uncertainty from the Brexit vote and Donald Trump's election to the US presidency.

Group M: no Brexit or Trump effect yet on adspend

Digital is cited as the factor that continues to drive adspend, with digital’s share to reach 33% next year.  In 2016, digital captured 72 cents of every new ad dollar, while TV had 21 cents. Next year, Group M says digital will capture 77 cents per new dollar and TV will get 17 cents. 

The 4.4% prediction is similar to Group’s M’s forecast earlier this year for 2017, which predicted global growth of 4.3%. 

The report says the US and China will account for half of all net growth in the 2016 and 2017, with China taking back a narrow lead over the US. 

Group M said the Brexit vote in June has "not impacted advertising" in the UK and maintains its UK forecast last year of 7% annual growth, with digital again cited as the driver for growth.

For the US, Group M upgraded its 2016 growth forecast from 3.1% to 3.2%. This includes revising TV from 3.4% to 4.1%, matching growth in the preceding US election years (2012, 2014) and helped by Summer Olympics demand.

However, there was some redirection of budgets from digital to TV in the US, particularly by the pharmaceutical and CPG categories, Group M said. Next year, it predicts growth to slow to 2.6% on the basis of the weak global and US GDP growth, and political uncertainty which as yet has not impacted budgets. 

Adam Smith, futures director at Group M, said: "Ad growth has shadowed the global economy's long, low and level recovery cycle since 2010. These new forecasts emphasize the ad story of our times is however structural, not cyclical. Twenty years on from the internet becoming a measured ad medium, digital remains the engine of advertising growth and disruptor-in-chief of the entire marketing economy.

"This multiplies options, opportunities and risk. The importance to advertisers of autonomy and diligence has never been higher."

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