Global adspend growth to accelerate to 4.7% in 'stellar' 2018

Warc anticipates global adspend growth this year to ring in at a healthy 4.7%, or $572bn (£410bn).

Growth will be boosted by this year's Fifa World Cup in Russia
Growth will be boosted by this year's Fifa World Cup in Russia

This is thanks to the PyeongChang Winter Olympics, Fifa World Cup, US mid-term elections and reduced dollar volatility in emerging markets.

Warc’s monthly Global Ad Trends report focuses on ad expenditure in 96 markets and tracks key trends in spending patterns by media and geography since 2009.

Going by region, the factors listed above will contribute to stronger growth in North America (5%), Asia-Pacific (6%) and Western Europe (2.6%) this year.

Central and Eastern Europe (8.4%) and Latin America (7%) will continue to expand at a strong rate. 

Advertising spend across the Middle East and Africa is expected to drop once more (-4.1%), though at a slower rate than in previous years.

This year should be a "stellar year" for global advertising, James McDonald, data editor at Warc, said. "Ad investment set to grow at its strongest rate since the post recovery years of 2010 and 2011. All global regions, with the exception of the Middle East, are expected to register growth, supported by key quadrennial events."

Roundup of 2017

Global advertising spend rose 3% to $546bn in 2017, based on recent data.

This is a slowdown from the 3.8% rise recorded in 2016 and is partly due to weaker growth in the United States (which is 34% of the global advertising pie). Last year, North America grew 3.3% to $199.6bn in 2017 (compared with 8% growth in 2016).

Growth in the world's second-largest ad region, Asia-Pacific, also cooled to 4.3% to total $162.8bn in 2017 compared with 5.3% in 2016. This was due to slower growth in Japan, which is 23% of the region’s total, due to a weaker yen.

On the other hand, the Chinese ad market – which represents 41% of total adspend in Asia, and 12% of global adspend – grew by 4.7% to $66.7bn last year, propelled by rapidly increasing spend on mobile ads.

Outside of these regions, fortunes were mixed. Spend in Western Europe (20% of the global total) rose by just 0.2% to $109.9bn in 2017, matching the rate recorded in 2016.

Conversely, adspend in Central and Eastern Europe grew by 14.5% to $21.2bn in 2017, making it the fastest-growing region last year. 

The Latin American ad market returned to growth (9.4% to US$31.2bn in 2017) after a 4.4% decline in 2016.

However, adspend in the Middle East and Africa fell for a second year (down 10.5% to $21.7bn in 2017 versus an 11.3% dip in 2016) due to political instability and the impact of a weaker trade price on oil-reliant economies.

The growth of mobile

Mobile was the only medium to gain a larger share of ad expenditure in 2017 and is now the world’s second-largest ad channel after TV. The channel increased its share of global adspend by an estimated 5.9 percentage points to 20.6% in 2017. This makes it worth $112bn (up 44.5% year-on-year).

Estimates indicate that mobile overtook desktop internet for the first time in 2017, as spend on desktop ads was thought to have taken a share of 18.3% (down 1.9pp year-on-year).

Nearly half (45%) of mobile advertising spend is based in the US, where $156 dollars per capita is spent on mobile ads.

The largest media channel, TV, is believed to have dropped 1.4 percentage points in 2017 and now takes 36.5% of global adspend ($199.5bn). 

Nevertheless, more ad dollars still go to TV networks ($199.5bn) than the Facebook/Google duopoly ($133.2bn).

Print continues to lose share. The channel was down an estimated 2.2 percentage points in 2017 to 12.5%. Since 2009, print has recorded a massive 21.5 percentage-points decrease in its share of global adspend, and has lost an average $11.5bn each year since 2012.

Out-of-home's share too dropped by 0.1 percentage points to 5.7% in 2017, while cinema's share held at 0.7% and radio was down by an estimated 0.2 percentage points to 5.7%.

"Mobile is now a key driver of global growth, and was the only channel to gain share of spend in 2017 – it now accounts for one in five ad dollars worldwide," McDonald noted. "Nevertheless, traditional media still attracts 61% of global ad investment, and TV and out-of-home will be among the main benefactors of increased brand and political campaign spending this year."

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