Digital to exceed 25% of total adspend in 2016
Combining forecasts for 2015 and actual figures for 2014, Carat has today issued its first worldwide ad expenditure forecasts for 2016, with all markets ring-fencing digital media spending.
Based on data received from 59 markets across the Americas, Asia Pacific and EMEA, the forecasts show digital media, with a predicted US $17.1 billion or +15.7% increase in spend in 2015, is outpacing previous predictions.
Carat said the dramatic rise is powered by huge global mobile and online video ad spend – up 50% and 21%, respectively, based on this year’s predictions. Carat also forecasts that digital will, for the first time, account for more than a quarter of all ad spend in 2016 with a market share of 25.9%.
In the UK the total advertising market is forecast to grow by +6.4%, with the Rugby World Cup – to be staged in the UK in the autumn – going some way to replace the revenues felt from the 2014 FIFA World Cup.
However, uncertainty around the general election results and a potential hung parliament could have a “small impact” on advertising revenues, the authors warn.
From a global perspective, Carat forecasts that in 2015 advertising spend across all media will increase by $23.8 billion to reach $540 billion, accounting for a +4.6% year-on-year increase.
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 ad 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 $10billion.
By media, whilst digital is the best performer in terms of growth, TV will continue to command the majority of market share for the foreseeable future, reaching 42.7% in 2014, and is 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, and with continuing declines for this media, it is predicted to fall behind radio for the first time in 2016.
“Carat’s latest advertising forecast gives us increased optimism for the outlook for global advertising spending,” said Jerry Buhlmann, CEO of Dentsu Aegis Network.
“With harder times behind us, negative growth markets are pleasingly now a minority, and collectively we can look ahead to 2016 with positive growth predicted for all key markets.
“The strength of digital continues to dominate discussions and the new distribution of spending. With a quarter of the global population now owning and relying on their smartphones daily, they are our second brain in our hands.
“Mobile dominates the way consumers access information, view content, browse products and purchase goods and this is reflected in the innovative services and approach we are discussing with our clients.”