Global Ad Market To Remain Sluggish But Digital Set To Dominate

Global Ad Market To Remain Sluggish But Digital Set To Dominate

A new report released by GroupM has predicted that ad spend globally will remain subdued over the coming 12 months.

B&T Magazine
Posted by B&T Magazine

The report predicts that global ad investment had grown about four per cent in 2015 and will continue to grow to four and a half per cent in 2016.

Meanwhile another report released this week by ZenithOptimedia says traditional spend on TV has already peaked and it will be surpassed by digital spend by 2018.

A similar report, this time by Magna Global, says that spends on TV actually fell for the first time year on year in 2015 (outside of a recession.)

Both the reports said the traditional TV players the world over – free-to-air and paid subscription – could look forward to an increasingly bleak future when it came to decreasing ad revenues. This was being mirrored in the falling share prices of these businesses both in Australia and globally.

According to the GroupM report China will contribute the most to global ad spends followed by the US and the UK. It also notes that spends towards traditional TV is falling but says it’s not as rapid as some are suggesting, falling about one percentage point per year since 2012.

Authors of the GroupM report said the challenges for agencies was that eyeballs were heading to different screens – primarily mobile – and the creative and the technology weren’t keeping pace.

Other predictions from the GroupM report included:

  • Global ad growth is expected to reach $22 billion in 2016.
  • Ninety per cent of the growth will come from digital spends.
  • Digital will snare 31 per cent share of ad spend globally.
  • Print would make up 18 per cent of global ad budgets.
  • Just six countries – China, US, UK, Brazil, India and Japan – will make up three-quarters of all ad growth for 2016.

Meanwhile, Magna Global report said ad spends should improve for 2016 with it being both an Olympic year and the US Presidential elections.

The largest ad market in the world remains the US with $US182.6 billion in all categories in 2015, followed by China with $US74.3 billion. The UK, Germany and Japan round out the Top Five, and the order isn’t expected to change any time soon, declared the ZenithOptimedia findings.