ZenithOptimedia predicts growth in global adspends in 2016

By afaqs! news bureau , afaqs!, New Delhi | In Advertising
Last updated : December 08, 2015
It is a 0.8 percentage point improvement from 2015.

Leading global media agency ZenithOptimedia has predicted that the global ad expenditure will accelerate to 4.7 per cent in 2016, amounting to US$579 billion by the end of the year. The global ad market has enjoyed stable growth since 2011, with growth rates ranging between 4 per cent and 5 per cent a year, and it is expected to maintain this pace for the rest of the forecast period.

Next year will be a comparatively stronger year for the world market, with global adspends touching 4.7 per cent, from 3.9 per cent in 2015. The year 2016 is a 'quadrennial' year, boosted by the US presidential elections, the Summer Olympics, and the UEFA Champions League in Europe.

The global media services network forecast that US elections will provide a net US$3.2bn boost to the US adspend, especially to television and internet advertising, while the Olympics lifts global adspends by a new US$2bn, especially to television and outdoor. UEFA Euro 2016 will further boost adspend by a net US$0.9bn, also concentrated in television and outdoor, mainly in Europe, Latin America and Asia-Pacific next year.

Interestingly, adspend growth is slowing down in three out of the four BRIC (Brazil, Russia, India and China, a group of emerging economies) markets that were responsible for much of last decade's ad market expansion. India is the only BRIC market that still continues to combine rapid growth and large scale, making it a distinct hot-spot of adspend growth. The market is benefiting from sustained, healthy economic growth and strengthening personal consumption. With adspends growing at double-digit annual rates here, it is expected that the market will expand by US$3 bn between 2015 and 2018.

Anupriya Acharya

Elaborating further on India, Anupriya Acharya, group CEO, ZenithOptimedia India, says, "It's been over 18 months since the new government led by Prime Minister Narendra Modi came to power. Last year, by this time it had captured the collective consciousness of the country, and we entered 2015 with a strong positive consumer and business sentiment. This irrational exuberance has tempered down to a more rational optimism and all the current economic and sentiment indicators suggest that the forward view remains positive.

Our growth forecast for India ad-expenditures for 2016 holds at 13 per cent. Television largely fuels this at 15 per cent and the print media (newspapers) at 10 per cent. Digital is expected to grow upwards of 20 per cent while all other media are expected to grow at 5-10 per cent. E-commerce, telecom, and mobile phones are expected to have the maximum growth, followed by auomobiles and FMCGs."

Despite the rapid growth of the rising markets, the US is still the biggest contributor of ad revenue in the global market. Between 2015 and 2018, Zenithoptimedia expects the global ad market to grow by US$77 billion. The US will contribute 26 per cent of this extra ad expenditure, closely followed by China, which will contribute 24 per cent. The UK comes third, contributing 7 per cent, and Indonesia is fourth, with 5 per cent.

By 2018, the internet will overtake the currently dominating medium of television as the largest single advertising medium globally. However, one of the reasons for television's loss of share is the rapid growth of paid search, which is essentially a direct response channel (together with classified), while television is the pre-eminent brand awareness channel, and is expected to remain so for more years to come.

Audiovisual advertising (television and online video) is gaining share of display advertising pie. It is estimated that audiovisual advertising will account for a record 48.4 per cent of display advertising in 2015, up from 44.1 per cent in 2010, and is expected to reach 48.9 per cent in 2018.

First Published : December 08, 2015
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