Advertising and digital communications group Dentsu Aegis Network has released its biannual forecasts, pointing to a more positive 2018 for global advertising expenditure than previously expected.
In Australia, advertising spend is forecast to grow 2.8 per cent this year to reach AUD 15.7 billion.
Digital continues to hold the largest share of total spend by channel, and is predicted to grow 6.1 per cent in the year ahead locally, representing a 48 per cent share of the total media spend.
Cinema is predicted to post the largest YOY growth at 6.6 per cent, with OOH expected to grow 5.0 per cent.
Globally, Ad-spend growth will rise from 3.3 per cent in 2017 to hit 3.9 per cent in 2018 – higher than the 3.6 per cent forecast in January 2018 and taking total investment to US$613.5bn.
Global events such as the Winter Olympics & Paralympics, the FIFA World Cup in Russia and US mid-term elections will play an important role in stimulating growth.
Commenting on the latest forecasts, Dentsu Aegis Network ANZ CEO Simon Ryan said, “The Australian market is showing promising signs of strength, driven by growth in digital advertising in particular.
“With an increasing focus on personalisation and accountability, marketers must continue to be clever about where they invest their advertising budget to reach consumers in the digital economy.”
Geographically, Asia Pacific and North America are the major growth regions, contributing 41 per cent and 32 per cent of the global increase respectively.
Western Europe accounts for 13 per cent with Latin America at 8 per cent and Eastern Europe 5 per cent.
Dentsu Aegis Network CEO Jerry Buhlmann said, “In the context of synchronised economic growth across the US, Europe and Asia, these figures point to a more positive outlook today than at the beginning of the year and represent a modest but encouraging source of optimism.
“We are seeing upward revisions in most key markets, with emerging economies such as India showing high rates of growth. The US economy is growing strongly as economic stimulation and tax cuts filter through. Spend in China continues to grow at pace, though driven almost entirely by the e-commerce platforms, Alibaba, Tencent and Baidu.
“Digital remains the dominant growth area with 25 per cent of global advertising spend expected to be delivered through mobile for the first time. Digital is now the leading form of advertising in 21 out of the 59 markets we track.”
Mobile on the go
The mobile device is steadily becoming our primary point of access to all digital services and content.
In 2018, 52.2 per cent of all worldwide online traffic was generated through mobile phones, up from 50.3 per cent in the previous year, according to Statista.
People now spend an unprecedented amount of time on their smartphones—more than five hours a day, according to some estimates.
This growth in usage is largely driven by the widespread availability of high-quality digital Video. Mobile Video consumption is exploding among all age groups and content categories.
Nine in 10 Social media users opt for mobile browsing, with mobile apps accounting for 70 per cent of time spent on Social media.
Reflecting this, mobile is forecast to represent a quarter of global ad spend 25.2 per cent this year exceeding the previous prediction of 24.8 per cent.
With Mobile payments forecast to be more popular in the coming years, Mobile is set to continue on a positive growth trajectory a forecast 23.3 per cent in 2018 and 18.8 per cent in 2019.
Digital still calls the tune
Worldwide Digital media spend is forecast to increase by 12.6 per cent in 2018, more than three times the rate of all media (3.9 per cent), to reach US$230.6 billion—a US$25.7 billion incremental increase year-on-year.
Online Video (+24.6 per cent) and Social Media (+21.6 per cent) are particularly strong.
Paid Search continues to account for the largest share of digital (39 per cent).
As previously predicted, Digital will overtake TV for the first time this year to account for 38.4 per cent share of total ad spend vs. 35.5 per cent.
In the US, Digital spend is forecast to overtake TV in 2019. Programmatic ad spend is expected to grow by 23.2 per cent in 2018 and 19.1 per cent in 2019 as the ability to consolidate programmatic buying strategies across formats and devices continues to be an opportunity for advertisers to reach the most valuable audiences at scale.
- Traditional media spend is forecast to decline by just -0.5 per cent in 2018 and -0.4 per cent in 2019. Newspapers and magazines are expected to continue their downward trend, with falls of -7.5 per cent and -6.5 per cent respectively. Radio (+2.0 per cent), Out of Home (+2.2 per cent) and Cinema (+5.9 per cent) spend are expected to show steady growth.
- TV spend is forecast to move back into growth in 2018 (+1.2 per cent), following a -0.7 per cent decline in 2017, remaining a major medium in the mix with 35.5 per cent of overall investment.
The full report can be downloaded here.
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