GroupM Investment Forecast For Australia: TV On The Rise As Digital Slips

GroupM has updated its 2018 ad investment forecasts and released its initial 2019 outlook.

GroupM predicts $24B in net new advertising investment this year, the best annual increment since the bounce back from the global recession in 2010 when $26B was added to investment.

GroupM estimates total advertising investment will grow by 4.5 per cent this year and by 3.9 per cent in 2019.

GroupM also reported that 2017 investment grew by 3.5 per cent, higher than the 3.1 per cent earlier predicted.

In terms of Australian markets, GroupM found digital is slipping while TV’s per cent of media share is on the rise.

Per cent change	2017	2018	2019
Digital total	7.0	7.4	6.8
Media total YOY per cent change	2.1	3.4	3.4

Per cent share of media	2017	2018	2019
TV total	-3.0	-0.8	0.3
Digital total	7.0	7.4	6.8
Media total YOY per cent change	2.1	3.4	3.4

Media in AU$M	2017	2018	2019
Digital total	7,917	8,503	9,086
Media total AUD m	15,620	16,154	16,711

Globally, increasing investment by advertisers in digital ad formats continues as the predominant theme in GroupM’s latest report.

As well as this, digital advertising will tally to $198B in 2017, $221B in 2018 and $243B in 2019.

Digital investment grew by 15 per cent last year, higher than the 12 per cent GroupM had predicted in December.

Twelve per cent growth is predicted in digital for 2018 and 10 per cent for 2019.

Digital’s share for 2018 will rise to 39 per cent, up from the 36 per cent GroupM earlier predicted.

In 2019, GroupM expects digital’s share to reach 42 per cent.

Digital advertising will account for 95 per cent of net new global advertising growth in 2018 and 99 per cent in 2019.

Excluding China, Facebook and Google captured 135 per cent of the growth in digital advertising investment in 2017 according to GroupM’s analysis.

While still a tough story for other digital media vendors, this is lower than GroupM expected.

GroupM anticipated that these two companies would account for 186 per cent of digital’s growth, but this is mitigated by GroupM’s expanded estimate of the total digital market with better representation of smaller advertisers (or the long tail of advertisers who often do not employ agencies).

GroupM also qualifies this assessment with the observation that the line between “digital” and “broadcast” continues to become less distinct.

Ad revenue flowing into the IP-delivered services of broadcast TV brands is counted as “digital.”

GroupM observes that advertising’s share of global GDP peaked between 2004-2006 at 0.85 per cent (that is under 1 per cent of global economic effort) and has declined to 0.68 per cent forecast for 2018.

Part of this is big advertisers controlling costs more closely in low growth environments. Younger consumer economies, where per- capita advertising investment is lower, are another factor.

However, other factors impacting advertising’s lower share of global GDP are measurement issues that could be solved.

These include the potential under measurement of digital advertising expenditures and difficulty quantifying the long tail of advertisers — the number one source of advertising growth.

Futures Director Adam Smith said, “We’d like to have better intelligence on the ways investment dollars are flowing to digital.

“Digital ad revenue is reported either in whole, or by type, principally display and search, but never discriminates between large and small media owners, nor the short and long tail of advertisers who buy with or without agency support.

“While the same concern applies to other media, digital is unique in its long tail being dominated by global vendors. Because digital is mostly walled gardens, a country is doing well if 20 per cent of its digital ad investment is properly categorized.”

The United States, China, the United Kingdom, Japan, India and the Philippines are the biggest growth contributors globally.

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