Global adspend growth down to 3.9% in 2014. Forecast for 2015: 4.9%

10 Dec,2014

 

By A Correspondent

 

Global advertising will rise 3.9 percent in 2014 to $513 billion, GroupM has announced, revising its midyear forecast for 2014 global measured media spend downward from 4.5 percent growth.

 

The revised forecast, published in the company’s biannual worldwide media and marketing forecast report, This Year, Next Year, also projects 4.9 percent growth in global ad spend in 2015, bringing measured global ad investment to $538 billion. The detailed India numbers are not yet available.

 

This Year, Next Year, is part of GroupM’s media and marketing forecasting series drawn from data supplied by holding company WPP’s worldwide resources in advertising, public relations, market research, and specialist communications

 

In the United States, 2014 growth is fractionally revised down from 3.4 percent in the company’s midyear forecast to 3.1 percent, for a total $170 billion in 2014. GroupM is looking for ad growth in the U.S. to accelerate to 3.9 percent in 2015, to $177 billion, with digital again making the dominant contribution and turning in expected growth of 17% percent.

 

“The world remains short of demand and uncomfortably short of inflation. However, two stabilising forces are the falling price of oil, which transfers spending power to the world’s consumers, and shrinking trade surpluses, especially China’s,” noted Adam Smith, GroupM Future’s Director and report editor of This Year, Next Year. “Smaller surpluses help aggregate demand. The Eurozone’s large surplus now makes it the biggest drag on world demand, and it remains the main headwind to ad growth”.

 

“As it relates to media,” commented Irwin Gotlieb, Global Chairman, GroupM, “the proliferation of choice is steadily increasing media consumption (and consequently supply) around the world. The effect of increased supply is a mitigation of media inflation for clients – they can achieve their objectives with minimal increases in spend, thus holding down demand. In conjunction with our improved attribution analytics, these trends are improving return on investment for our clients.”

 

“While growth has slowed, we see advertisers pushing for unprecedented levels of innovation that is both impactful and scalable. We believe this increase in demand for new uses of media substantially elevates the available level of learning and creativity, and will benefit the entire marketplace in the long-term,” said Dominic Proctor, President of GroupM Global.

 

Less Dependence on Faster-Growth Markets

One of the more striking features of this new forecast is the falling dependence on ‘faster-growth’ markets. Comprising around 44 percent of the world’s economy in 2014, they are still certainly punching above their weight, and are slated to contribute 55 percent of net new ad dollars this year, and 57 percent next year – but this is down from rates in the 70s for the period 2010-2013, peaking at just under 80 percent in 2013.

 

The five main countries impacting ad growth in 2014, in order, are:

:: China, where the forecast slows from 10 percent to eight percent and ad growth is presently trailing nominal GDP;
:: Brazil, where a big World Cup and election year was a little less big than expected;
:: Israel, for what we assess are geopolitical reasons;
:: Nigeria, reflecting World Cup disappointment and a late start to election campaigning; and
:: Russia, likely due to political reasons as well.

 

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