Global ad market posts its best figures since 2010, claims report | M&M Global

Global ad market posts its best figures since 2010, claims report

The international advertising market has defied global political uncertainly to post its strongest annual growth since 2010, up 5.7% year-on-year, according to new figures by Magna.

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The IPG Mediabrands agency claims that global ad sales will have reached $493bn in 2016, with search and social capturing the bulk of that annual growth – $23bn out of a total of $26bn.

Buoyed by the US presidential election and the Rio 2016 Olympic Games, the US market achieved its strongest growth in 12 years, up nearly 7% year-on-year to $180bn.

Other ad markets showing significant growth in 2016 include China (up 7.2% year-on-year), Australia (7.4%) and the UK (5.2%), despite its ‘Brexit’ decision to leave the European Union.

However, Magna predicts that global ad growth will slow in 2017, down to 3.6%, due to “economic and political uncertainty” and a lack of cyclical events such as the FIFA World Cup or Olympic Games.

Vincent Létang, executive vice president, global market intelligence at Magna, said: “Advertising sales were strong overall in 2016 and North America was the most dynamic region. The resurgence of television [+4%] did not come at the expense of digital [+17%].

“Both grew strongly this year because advertisers are funding social spend [+46%] and search spend [+17%] by reallocating below-the-line offline marketing budgets more than traditional branding mass media. At the same time, they had to face significant cost increases in television to maintain their share of voice and reach.”

“Digital remains the engine of advertising growth and disruptor-in-chief of the entire marketing economy”

WPP’s GroupM offers a more optimistic outlook for 2017. It is forecasting year-on-year global ad market growth of 4.4%, up marginally from 4.3% in 2016. This is driven by strong performances in the US and China, as well as by digital media, which is predicted to reach 33% of the global total.

The also anticipates an improved performance from Brazil in 2017, with the ad market set to grow 2% year-on-year, as it slowly emerges from recession. India, meanwhile, is expected to continue its rapid ad sales growth, albeit declining slightly from 13.8% in 2016 to 12.5% to 2017.

GroupM’s futures director Adam Smith commented: “Ad growth has shadowed the global economy’s long, low and level recovery cycle since 2010. These new forecasts emphasise the ad story of our times is however structural, not cyclical.

“Twenty years on from the internet becoming a measured ad medium, digital remains the engine of advertising growth and disruptor-in-chief of the entire marketing economy. This multiplies options, opportunities and risk. The importance to advertisers of autonomy and diligence has never been higher.”

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