Dentsu Aegis Network's latest advertising spend forecast, based on data from 59 markets, predicts global growth will reach +3.6 per cent in 2019, following growth of 4.3 per cent in 2018, taking total investment to US $609.9 billion. In Asia Pacific, there is a predicted +4.0 per cent growth in 2019, following +5.3 per cent in 2018, taking total investment to US$216 billion.
Geographically, Asia Pacific is the leading contributor to the global increase of US $20.9billion in 2019 compared to the previous year, contributing 39 per cent of the global increase, closely followed by North America at 34 per cent. Comparatively, Western Europe is forecast to contribute 14 per cent to new ad dollars with Latin America at 11 per cent and Central and Eastern Europe at 3 per cent.
In Asia Pacific, forecasts have been revised downwards (-0.5 per cent) from January following market softness at the beginning of the year particularly for TV, the lack of major events scheduled was also a contributory factor. China continues to be the leading contributor to Asia Pacific and global ad spend and will continue to grow in 2019 by +5.4 per cent to reach RMB 671 billion, a surprisingly healthy and stable growth rate, which remains on track despite the headwinds from trade tensions with the U.S.
The global forecast reflects softening growth across 9 of the top 13 advertising markets worldwide, with India and Brazil bucking the trend with accelerating growth in 2019.
Speaking on the report, Kartik Iyer, President, Amplifi India said, "India is at the cusp of a major change. We are as of today seeing significant churn in the media consumption habits which is therefore driving change in ad spends. With the expansion on online video via mobile devices, the role of TV is changing and entertainment at one's own pace is becoming the norm. This is driving media owners to relook at their product and distribution strategies."
Some markets saw downward revisions from January 2019 forecasts including Italy and Russia with both markets seeing GDP slow alongside ad spend.
Takaki Hibino, Executive Chairman, Dentsu Aegis Network Asia Pacific said "Asia Pacific has long been the melting pot of digital and technology developments. Though we have been facing a tougher economic environment, our ad spend forecast has shown that digital connectivity in APAC remains at its peak and consumer adoption rates have leapfrogged."
Key market trends
•India: forecast double-digit 2019 growth of 11.4 per cent to reach INR 696.9 billion (up from the 10.6 per cent forecast in January and 10.8 per cent growth in 2018) with the Cricket World Cup putting growth on the front foot. Lok Sabha Elections are also set to increase spend in 2019. Digital media spend is forecast to grow by 32.7 per cent in 2019 to account for INR 144.1 billion, making up 21per cent share of total spend. Infrastructure has propelled the growth in digital consumption. TV continues to be the leading media in 2019 and will contribute 39per cent share of total spend. Despite digital growth, TV continues to be dominant as it enjoys unmatched share of audiences. With 40 per cent allocation of advertising spends, TV is forecast to expand in 2019 by 9.5 per cent to reach INR 271.4 billion.
•China: the ad market continues to be a leading contributor to global ad spend and will continue to grow in 2019 by +5.4 per cent to reach RMB 671 billion but at a lower growth rate than the +7.0 per cent growth forecast in the January 2019 report. Growth for the market in 2019 has been revised downwards due to higher than expected decline in TV spend at the start of the year. Digital is still the biggest driver of growth in total ad spend in China with the biggest share (63.6 percent in 2019) and growth rate. E-commerce is growing consistently and strongly, taking the biggest share within Digital. The decline of TV advertising (-6.8 percent in 2019) has affected the total market trend. Within TV, ad investments in CCTV and provincial satellite TV are still on an increasing trend, while ad investments in provincial and local TV channels have declined significantly.
•Australia:2019 is expected to grow by 1.9 per cent to AUD $16.6 billion, which is a modest increase in overall spend from 2018. Majority of the growth is expected to come from digital and video channels. Digital continues to drive advertising revenue growth and is expected to increase by 6.8 per cent in 2019 representing roughly half of total media spend (54 per cent). Online video is a key driver for digital spending and is expected to increase by 28.4 per cent in 2019. Video is the golden child of digital with strong momentum making up a large proportion of general display. This positive trend is backed by publishers as brands continue to seek premium environments in which to showcase their offerings.
Global media trends
•Digital continues to power ad spend growth and is forecast to grow 11.5per cent in 2019 to reach US $249.7 billion and 41.8 per cent of global share. Growth is steady into 2020 putting digital's share of ad spend at nearly 45 per cent by the end of the year.
•Mobile is the fastest growing platform within digital and is forecast to grow 21.4 per cent in 2019. Powering this growth is the increasing consumption of video on mobile - from Instagram Stories, TikTok and Snapchat to YouTube and VOD - with online video in general set to grow 20.5 per cent in 2019.
•TV ad-spend is forecast to shrink slightly in 2019 (-0.1 per cent) with a return to modest growth in 2020 of 0.6 per cent. Into 2020 growth will be driven by more dynamic TV opportunities and innovation as the penetration of smart TVs continues.
•The decline of traditional print has accelerated from our January 2019 forecasts (Newspapers -7.7 per cent and Magazines -7.4 per cent) as digital continues to dominate.
•Out of Home sees continued growth and an upwards revision from January to 4.3 per cent in 2019 to reach 6.3 per cent share. Growth is driven by innovations in DOOH.
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