Growth in the world economy slowed a little in 2013, alongside advertising, recording a modest 3.5% increase in measured global ad investment to stand at $11 billion, according to the latest ad forecast from GroupM.
While recovery has been slow, GroupM’s forecast for 2015 envisages global ad investment finally passing its 2007 peak in real terms. However, the milestone is still not in prospect for the more mature markets of North America, Europe and Asia, which, though mostly growing, remain collectively well below 2007 – and are expected to do so until 2019.
Global ‘ad intensity’ – advertising’s percentage of GDP – has fallen throughout, from a recent peak of 0.9% in the dotcom boom of 2000 to 0.72% today, remaining stable only in the fastest-growing regions.
According to the report, this is in part the result of advertising investment migrating from mature economies, where the ratio is higher, to the younger, as well as the rise of retailer power in mature markets, which reduces brands’ free cash flow – and freedom – to invest in advertising as they would wish.
The forecast reveals that TV’s share of measured ad budgets is fractionally eroding, but still dominates at approximately 44%.
GroupM in Sweden, France, Thailand and the Philippines remark this time on falling linear audiences; however, the company states that this does not automatically equate to falling revenue, which is governed by advertiser demand and the availability of alternatives.
The growing popularity of on-demand viewing is the most frequently-cited trend in the report, but in common with other digital media, the on-demand audience is less well-measured than traditional TV audience research. The Group states that it is far from disrupting linear TV, but has made video advertising in total “riskier” to the advertiser.
“Legacy TV brands’ catch-up services often capture much if not a majority of ad investment in online video,” states the report.
“This revenue is routinely measured as ‘internet’, so not allocated to TV. We should therefore expect allocation to attract more interest from legacy media vendors in mature markets, especially beleaguered newsbrands.”
Digital’s share, meanwhile, continues its steep ascent, accounting for a forecast 21.6% of measured ad investment in 2014 and 23.6% in 2015. In 2014 and 2015, GroupM expects digital to furnish 63% of incremental ad dollars worldwide, with TV supplying most of the rest.
MediaTel subscribers can access GroupM’s UK forecast figures in the Media Landscape tool
