‘Digital Spend Will Be More Than 25% In 2016’ Predicts Dentsu Aegis

‘Digital Spend Will Be More Than 25% In 2016’ Predicts Dentsu Aegis
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The massive increase in mobile ad spend and online video on a global basis will mean digital spend will increase to more than 25% in 2016, predicts ad agency network, Dentsu Aegis Network.

It’s the first forecast for worldwide advertising expenditure for the Network and combines its latest forecasts for 2015 and actual figures for 2014. The reports has the Network predicting all markets ring-fencing digital media spending, even when faced with negative economic headwinds.

Based on data received from 59 markets across the Americas, Asia Pacific and EMEA, Dentsu Aegis Network’s latest global advertising expenditure forecasts show digital media, with a predicted US$17.1 billion or +15.7% increase in spend in 2015, is outpacing previous predictions from the report in September 2014.

Powered by a dramatic rise in mobile ad spending globally of +50% and online video of +21.1% predicted in 2015, Dentsu Aegis Network forecasts that digital will, for the first time, account for more than a quarter of all advertising spend in 2016 with a market share of 25.9%.

From a global perspective, Dentsu Aegis Network forecasts that in 2015 advertising spend across all media will increase by US$23.8 billion to reach US$540 billion, accounting for a +4.6% year-on-year increase. Market optimism continues into 2016 with Dentsu Aegis Network’s first forecast for the year predicting a year-on-year global advertising growth of +5.0%.

In 2014 all regions reported positive growth, from Western Europe at +2.3%, +4.5% in North America, +5.3% for Asia Pacific and high performing Latin America at +11.4%.

Regional confidence is predicted to continue in 2015 with all key markets forecasting positive growth next year except Russia, due to a struggling advertising market and predicted recession. Western Europe is strengthened by a second consecutive year of positive growth driven by strong numbers in the UK and Spain; as well Greece, Ireland, and Portugal returning to positive growth after six consecutive years of ad spend declines.

North America continues to grow at a solid pace of +4.5% in 2015 and +4.6% in 2016, with programmatic spending in the US predicted to grow by +137%, reaching spend levels of US$10billion.

By media, whilst digital is the star performer in terms of growth, achieving higher that predicted levels in 2014 of +17.4% and accounting for 21.7% of market share, TV will continue to command the majority of market share for the foreseeable future, reaching 42.7% in 2014. It is also predicted to grow by more than +3% year-on-year in 2015 and 2016.

The steady decline in print* is expected to continue, however out-of-home is now positioned as the second fastest growth media, behind digital, with a global market share of spend of 7.1%. For the first time, out-of-home is predicted to outpace magazines global share of advertising spend, with magazines forecast to achieve 6.9% market share in 2015. It is further predicted that with continuing declines for this media, it will fall behind radio for the first time in 2016.

Commenting on the report, Luke Littlefield, CEO of Dentsu Aegis Network ANZ, said: “It is pleasing to see that 2014 was the second consecutive year of growth in ad spend in Australia, consolidating the growth we saw in 2013 and reflecting the cautious but positive consumer and business sentiment in our market. Digital is the world we live in and the economy – within our overall growth forecast of 1% for 2015, we are forecasting strong double growth in digital and a total share of ad spend of around 40%. ”

“The next generation of business will be completely within the digital economy, posing disruption to established businesses and reflecting the fact that from a communications perspective the battleground between traditional and peer-to-peer businesses will be in the convergent media space. As a business, we have a strong focus on providing clients innovative solutions across all platforms, however we will see mobile, video, content and wearable technology further and further embedded into consumers’ lives. ”

Nick Waters CEO Dentsu Aegis Network Asia Pacific said: “A fully convergent and digital advertising landscape is rapidly becoming a reality, with a predicted 20.1% growth in digital advertising spend this year in Asia Pacific – the most of any region globally.

“Asian markets are leading the adoption of internet related platforms and technologies, and this uptake will drive a boom in mobile commerce in the region this year. Online video demonstrates strong growth with more need for original ‘made for digital’ content. Those who understand and are able to support clients in their growing need for convergent communications solutions will benefit this year.”

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