The global ad market is growing steadily, and despite disappointing performances in a few markets it is adding more than US$20bn a year. Half of this growth is coming from just two markets, the US and China.
We forecast that global advertising expenditure will grow 4.0% to US$558bn by the end of 2017. This is in line with the steady 4%-5% growth in adspend we have seen since 2011. However, our forecast is down fractionally from the 4.2% growth that we predicted in June. The stronger eurozone economy has yet to feed through to advertising, and we have downgraded our forecasts for seven eurozone markets since then. Mexico’s television market has been disappointingly weak; the extended period of mourning for King Bhumibol Adulyadej has led to a second year of decline for Thailand; and Malaysia’s recovery from the downturn of 2016 has been less rapid than we hoped. These disappointments have been partially offset by the boost provided by Canada’s healthy economy to its ad market, and Russia’s return to full growth after the oil-price crash and imposition of trading sanctions.
Next year we forecast 4.2% growth in global adspend, boosted by the Winter Olympics in Korea, the football World Cup in Russia, and the mid-term elections in the US.
The US and China will contribute the most new ad dollars to 2019
The US will be the leading contributor of new ad dollars to the global market over the next three years, making up in scale what it lacks in speed. China will come second, combining large scale and rapid growth (though its growth is slowing as its scale increases). Between 2016 and 2019 we forecast global advertising expenditure to increase by US$69 billion in total. The US will contribute 29% of this extra ad expenditure and China will contribute 22%, followed by Indonesia, which will contribute 5%, and India, the Philippines and Japan, which will each contribute 4%.
‘Rising Markets’ are gaining ground
Five of the ten largest contributors will be what we term Rising Markets – i.e. outside North America, Western Europe and Japan. Between them, these five markets (China,
Indonesia, India, the Philippines and Russia) will contribute 37% of new adspend over the next three years. We forecast all Rising Markets together to contribute 55% of additional ad expenditure between 2016 and 2019, and to increase their share of the global market from 37% to 39%.
