Global advertising market ‘back on track’ says IPG’s Magna Global
Magna Global, Interpublic’s trading and forecasting wing, has predicted the global advertising market will grow by +3.0% this year to $486 billion – slowing down from 2012 (+3.9%) – and then accelerate by +6.1% in 2014, to $515 billion.
Compared to the previous forecasts, published in December 2012, this represents a small downgrade for 2013 (-0.1%) and a small increase for 2014 (+0.1%).
Despite a sluggish economy, the UK was one of the very few European markets to grow in 2012. Magna forecasts UK ad revenue to grow 2.2% in 2013 and 2.5% in 2014.
The predicted acceleration in ad revenues is in line with expectations of accelerated economic growth in the second half of 2013 and throughout 2014.
Although the economic forecast is still modest for developed markets (+1.2% and then +2.2%) and for Europe in particular (+0% and then +1.3%), it will in many cases bring the economic environment to the point where business growth triggers not only ad spend growth but, in some markets, faster-than-GDP growth.
It is now expected that cautious marketers can switch to ‘expansion mode’, according to the report.
Globally, digital media will continue its double-digit growth in 2013, as ad revenues will increase +13.4% to $113.6 billion.
Growth will be driven by search (+14.6% to $52 billion), video (+21% to $6.6 billion), mobile formats (+54% to $12 billion) and social formats (+39.6% to $8.2 billion). Other formats will barely grow, according to the report – and actually decline in many markets due to the ‘commoditisation and deflation of display inventory’.
Television advertising growth will slow down in 2013 due to the absence of global televised events. Following a +5.0% growth in 2012, ad sales will grow by only +2.0% to $196.5 billion, but TV remains the leading media category (40% market share) ahead of digital.
Print formats continue their decline: in 2013 newspaper ad revenues will decline by -3.3% and magazine revenues by -5.1% to a combined $110 billion (a 23% market share). Radio advertising will grow by +1.1% to $32.5 billion and out-of-home media revenues will increase by +2.9% to $32.6 billion.
There continues to be wide regional and national contrasts in the global advertising landscape in 2013. There will be almost no growth this year in EMEA (+0.4%) and North America (+0.7%).
On the other hand, Magna is increasing the 2013 forecast for Latin America (+12.5%) and for APAC (+5.9%).
The Middle East and Africa sub-region will be growing by +4.8%, with advertising expenditure increasing in the Gulf Cooperation Council countries (+3.8%) and in South Africa (+5.5%) but decreasing in Morocco (-2.1%) and Kenya (-20%).