Agency conglomerate Dentsu Aegis Network has forecast 2.4 per cent growth in Australian ad spend to $16.3 billion in 2019.

Dentsu Aegis Network reckons growth will be driven by the upcoming state election (NSW) and federal election during January and April, and part of Q2 of 2019.

Digital continues to drive advertising revenue growth locally, and digital media is expected to increase by 5.7 per cent in 2019.

Online video is expected to reach the $2 billion market value in 2019 in Australia. Mobile is expected to increase by 28 per cent to a total advertising market value of $5.3 billion in 2019, representing 62 per cent of the total digital spend.

Dentsu Aegis Network’s latest advertising spend forecast, based on data from 59 markets, predicts global growth will reach 3.8 per cent in 2019, following 4.1 per cent in 2018, taking total investment to US$625 billion.

In Asia Pacific, there is a predicted 4.5 per cent growth in 2019, following 4.6 per cent in 2018, taking total investment to US$220 billion.

Geographically, Asia Pacific will be a major growth region, contributing 42 per cent of the global increase.

Comparatively, North America accounts for 30 per cent, Western Europe accounts for 15 per cent with Latin America at 10 per cent and Central and Eastern Europe at 4 per cent.

Growth continues to be dominated by digital channels, with digital dominating close to half of Asia Pacific’s share of total ad-spend.

Digital will be the leading channel in 26 of 59 markets analysed, with Malaysia and Singapore joining this list for the first time.

Asia Pacific’s digital share (49 per cent) remains ahead of the digital share of total global ad-spend (41 per cent).

Among the 14 Asia Pacific markets surveyed, China has the highest digital share (63 per cent), followed by Australia (52 per cent), New Zealand (49 per cent) and Hong Kong (48 per cent).

This suggests room for further gains for the region.

Within digital, mobile continues to dominate growth with over half of Asia Pacific spend (58 per cent) now delivered through mobile devices.

Again, markets such as China – where 76 per cent of digital spend is through mobile – suggest the trend has a long way yet to run.

The global forecast reflects a slowing of growth across 10 of the top 13 advertising markets worldwide, with only Canada, India and Japan bucking the trend.

2019 will not benefit from global events such as the Winter Olympics per cent Paralympics, the FIFA World Cup in Russia and US mid-term elections, all of which drove ad-spend in 2018.

Speaking on the findings Dentsu Aegis Network Asia Pacific CEO Nick Waters said: “Asia Pacific continues to see growth through digital connectivity – driven not only by advances in technology, but the increasing speed of consumer adoption.

“This region has been leading the way in the uptake of new technology for quite some years, and the world leading growth in digital seen in this forecast continues to show Asia Pacific at the forefront of new developments in this area.

“In China where digital penetration is highest, the trend shows little sign of slowing down.”

Key market trends 

1. China: growth forecast at 7 per cent in 2019 to reach RMB682.1 billion. Digital dominates (63 per cent of share) and growth will continue at 12.5 per cent, driven by rising consumer affluence. OOH is forecast to grow 10.0 per cent whilst linear TV is forecast to decline by 4.0 per cent as advertisers shift budgets to online TV.
2. Australia: growth forecast at 2.4 per cent to reach $16.3 billion in 2019. Growth will be driven by the upcoming state election (NSW) and Federal election during Jan – Apr, and part of Q2 of 2019. Digital continues to drive advertising revenue growth and digital media is expected to increase by 5.7 per cent in 2019. Online video is expected to reach the $2 billion market value by 2019. Mobile is expected to increase by 28 per cent to a total advertising market value of $5.3 billion in 2019, representing 62 per cent of the total digital spend.
3. India: growth forecast at 10.6 per cent to reach USD10.1 billion in 2019. Television share continues to dominate ad-spend at 38.7 per cent in 2019 with India being the second largest subscription television market in the Asia Pacific region in terms of number of subscribers. There will be a slight but gradual improvement in digital forecast at 0.1 per cent, representing 20.9 per cent of total advertising spend with mobile accounting for 52 per cent of total digital spend.

Global media trends

1. Digital ad-spend to grow by 12.0 per cent in 2019 to reach US$254 billion and 41 per cent of global share. Digital will be the leading channel in 26 of 59 markets analysed, with the US, Czech Republic, Malaysia and Singapore joining this list for the first time.
2. Strong growth on mobile continues (19.2 per cent) with video particularly strong (20 per cent), driven by viewing on mobile devices and the growing popularity of catch up. Social media growth forecast to remain strong in 2019 (18.4 per cent), despite brand safety and privacy concerns.
3. Programmatic forecast to grow 19.2 per cent in 2019 as the model starts to be adopted across other media e.g. TV, DOOH.
4. TV ad-spend is forecast to grow 0.5 per cent in the face of competition from video-on-demand services such as Netflix. However, TV continues to innovate – particularly in the US – through ad-formats, reduced ad loads and attribution solutions.
5. Radio is forecast to grow 1.1 per cent in 2019 to reach US$37 billion – 6.0 per cent of total spend. Fast-growing technologies such as voice assistants and smart speakers are expected to push the usage of audio.
6. Traditional print continues to decline (Newspapers 7.2 per cent and Magazines 7.0 per cent in 2019) as the focus moves to digital.
7. Out of home continues to grow (4.0 per cent in 2019) to reach 6.3 per cent share, with growth driven by DOOH. 

Figure 1: Growth in global advertising spend 2018-2020

	Year-on-year per cent growth at current prices
	2018a	2019f	2020f
GLOBAL	4.1 (3.9)	3.8 (3.8)	4.3
NORTH AMERICA	3.4 (3.4)	3.1 (3.2)	3.6
USA	3.4 (3.4)	3.0 (3.1)	3.6
CANADA	3.7 (2.3)	5.2 (5.1)	5.1
W. EUROPE	3.4 (2.9)	3.2 (2.9)	3.3
UK	6.5 (4.2)	6.1 (4.7)	7.1
GERMANY	1.0 (2.6)	0.5 (2.9)	0.5
FRANCE	3.6 (2.5)	3.1 (2.8)	2.5
ITALY	1.6 (1.4)	0.8 (1.1)	1.6
SPAIN	1.8 (1.5)	1.2 (1.2)	0.8
C per cent EE	8.6 (7.8)	5.8 (6.6)	6.2
RUSSIA	12.0 (11.7)	6.9 (8.5)	6.7
ASIA PACIFIC	4.6 (4.5)	4.5 (4.4)	4.9
AUSTRALIA	3.7 (2.8)	2.4 (2.4)	2.6
CHINA	7.8 (6.5)	7.0 (6.0)	6.4
INDIA	9.6 (10.5)	10.6 (11.1)	11.6
JAPAN	0.2 (1.5)	0.6 (1.2)	2.4
LATIN AMERICA	9.9 (6.9)	7.9 (7.3)	8.6
BRAZIL	7.1 (2.3)	3.6 (2.6)	6.2
	Figures in brackets show our previous forecasts from June 2018

 

Figure 2: Growth in global advertising spend by media, 2018-20 ( per cent YoY)

	Global year-on-year per cent growth at current prices
	2018a	2019f	2020f
Television	0.8 (1.2)	0.5 (1.1)	1.6
Newspapers	9.1 (7.5)	7.2 (7.4)	6.8
Magazines	6.8 (6.5)	7.0 (6.4)	5.4
Radio	2.7 (2.0)	1.1 (1.2)	1.2
Cinema	3.2 (5.9)	4.5 (5.2)	4.5
OOH	4.7 (2.2)	4.0 (2.1)	3.9
Digital	13.8 (12.6)	12.0 (11.3)	10.8
	Figures in brackets show our previous forecasts from June 2018