What You Need to Know About the Global Ad Market

IPG’s Magna Global is saying it’s going to happen sooner – in 2017.

Chinese digital strength is supported by dominant local internet companies whose linked platforms between search, social media and e-commerce are just as sophisticated as those seen in global giants Google, Facebook and Amazon.

Digital ad spending growth is being driven by social media and video according to the forecast. In that context advertising spending grew by 16.3 per cent in 2015 to approximately $8 billion allowing India to become the 12th biggest ad market in the world at the expense of Russian Federation. While the medium will see biannual boosts from political advertising, Magna Global says that excluding political, it will be down 1.4 percent a year through 2020.

For the first time after the recession, TV ad spending hasn’t grown, as per ad revenue updates globally by ZenithOptimedia and MAGNA Global that were released this Monday.

GroupM estimates 2015 worldwide spending on media and marketing will total $924.4 billion.

“We see that digital’s data and automation capabilities are inspiring the evolution all media – in all markets across the globe – but digital will continue its powerful growth and market share gains”. While digital media can be precisely targeted and measured in ways that are more challenging when it comes to TV, most digital formats are subject to ad blocking, fraud or viewability issues – though not search. But the landscape changes so quickly in digital advertising that ads that are popular now – social, video and the mainstay, search – could be supplanted by new forms, eventually making the current disruptors the disrupted.

Television continues to weaken in APAC as it does around the globe, but in 2015 only three APAC markets out of 16 will see shrinking television budgets. “This is affecting media allocation and valuation, which can upset spending trends as more sophisticated data applications and measurement metrics are utilized in media portfolio management”. Growth in digital is highest in Indonesia (74 percent) and India (49 percent). Newspapers and magazines had decreases (-8.6 percent and -10.1 percent, respectively). Share of mobile will increase from 32 per cent to close to half the pie in 2016.

This is lower than the previous forecast of 3.9 percent in June and represents a slowdown compared to the 2014 growth of 4.9 percent.

It’s not all bleak for TV, of course, as even-numbered years typically fare better than odd-numbered years, so TV ad revenue should grow in 2016 courtesy of a USA presidential election, the Olympic games and the UEFA Football championship in Europe. That rate suggests there will be no significant acceleration in underlying ad demand next year, considering that 2015 ad revenue probably rose 3.2%, said Magna Global’s director of global forecasting Vincent Letang.

The agency is predicting ad sales to grow by 4.6 percent, marginally less than its previous forecast.