18 Jun 2024 04:25

Advertising & Marketing

Growth in the US, Europe and Asia boosts global ad market

Demand for media is rising in North America, Western Europe and Asia Pacific, so be on the look-out for media inflation.

The true effects of political upheavals like Brexit will be felt only in the long term; pay more attention to how consumers are actually behaving than the latest headlines.

Global advertising expenditure will grow 4.4% this year to reach US$539bn, ahead of the 4.1% we forecast back in June. Advertising expenditure will then expand by 4.5% in 2017 and 4.6% in 2018 – up from our previous growth forecasts for both years, which were 4.3% and 4.4% respectively. By 2018 global advertising expenditure will total US$589bn, US$4bn more than forecast in June.

This upgrade is mainly the result of stronger-than-expected growth in the US, where a strong labour market has encouraged consumers to increase their expenditure, and advertisers have fought harder for their share of the expanding market.

We also expect Asia Pacific to grow 6.3% this year, up from our previous forecast of 6.2%, thanks to heavy political spending in the Philippines in the run-up to the May 2016 elections. And we have increased our forecast for Western Europe from 3.5% to 3.6% growth this year, because improved conditions in Belgium, Finland, Germany, Italy, Norway, Portugal and Sweden have compensated for slowdown in the UK.

Although the vote for ‘Brexit’ in the UK’s EU referendum came as a shock to many in the market, so far advertisers have reacted calmly, with no widespread budget reductions. We forecast 5.4% growth in adspend in the UK this year, fractionally less than our 5.6% forecast just before the vote.

In the short term, uncertainty about the consequences of the vote will make companies less likely to invest in new products, and consumers less likely to take on big spending commitments. This leads us to forecast 3.4% growth next year, down from our pre-vote forecast of 4.0% growth.

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