Global media network Carat Media has published its first forecast for worldwide advertising expenditure in 2016, combined with its latest forecasts for 2015.
The report projects 11 per cent increase in advertising spend in India for 2015. According to Carat, following the formation of a stable government in 2014 in India, economic prospects look bright. Advertising spend increased by 8.7 per cent in 2014 and it is forecast to leap by double digits of 11 per cent in 2015. Further growth of 11.3 per cent is predicted for 2016.
In the Asia Pacific region, the advertising spend is forecast to grow by 5.2 per cent in 2015. This has, however, been revised down from the 5.9 per cent previously forecast in September 2014, with its major market Japan moderating forecasts from 1.7 to 0.9 per cent, alongside a number of other markets including Hong Kong, Taiwan, Malaysia, and Vietnam.
Dentsu Aegis Network Asia Pacific CEO Nick Waters said, “India’s prospects are positive, following the 2014 general election success of the BJP. Brought to office with a clear mandate and a pro-business agenda, India looks to be one of the more attractive markets in Asia Pacific in the short to medium term. Japan performed better in 2014 than predicted.
Last-minute demand before the increase in consumption tax in April gave the market a boost, as did the Sochi Winter Olympics and the FIFA World Cup. As Japan heads towards the 2020 Tokyo Olympics, there is cause for cautious optimism.” Furthermore, growth is expected to pick up pace in 12 out of the 14 markets in 2016 with overall growth of 5.8 per cent in 2016.
Meanwhile, the advertising market in China is forecast to increase this year by 7.9 per cent in 2015 to RMB (Chinese Yuan) 514 million. “Growth in China is the highest in 2015 of the key markets behind only India, but compared to the double-digit growth rates witnessed in the past, 7.9 per cent can be seen as a medium growth rate.
This is in line with the economy in China which is seeing a moderation in GDP as a more sustainable growth is sought. The total advertising market in China in 2016 is forecast to grow by 8.1 per cent,” the report states.
Globally, digital media spend is forecast to increase by $17.1 billion this year to reach 23.9 per cent of total global media spend in 2015. Digital’s growth far outpaces all other media types with a forecast increase of 15.7 per cent in 2015 and 13.8 per cent in 2016.
Carat predicts digital spend to reach more than 25 per cent of total advertising spend in 2016, fuelled by an upsurge in mobile advertising spending in 2015. Waters said, “As global advertising expenditure grows so does Asia Pacific, with the historical driver China predicted to grow this year to RMB 514 million at a steady 7.9 per cent.”
The report adds that the growth in digital spend is highest in Asia Pacific at 20.1 per cent in 2015, followed by 16.4 per cent in North America, and 16.2 per cent in Latin America. Even in Central and Eastern Europe, which is showing overall sluggish ad market growth, digital spending is predicted to achieve double-digit growth this year of 12.9 per cent. TV continues to command the highest share of spend, 42.2 per cent globally in 2015, remaining popular particularly in Latin America and the Middle East, with a share of spend above the global average in APAC and C&EE.
However, there are indications of TV’s share slowly eroding. It has decreased by 1.2 per cent points over the past 5 years. Growth was boosted last year by a series of events with 4.4 per cent growth. TV spend is predicted to increase by 3.6 per cent this year, picking up in 2016 a quadrennial year, to 3.9 per cent.
Mobile spend too is rising at 49.7 per cent in 2015 with circa 50 per cent growth in each of the regions—Western Europe, Asia Pacific, North America, and double-digit growth in Latin America and C&EE.
Carat sees a major shift in behaviour with internet usage on mobile devices catching up with PC usage and exceeding it in some markets. Yet at an investment level, there is still a significant discrepancy with the amount of time spent with mobile media disproportionate to the advertising share mobile attracts. A factor that is holding back investment in mobile is the difficulty in proving the ROI for more traditional businesses.
Focusing on social media, the report mentioned that mobility is the primary reason behind social’s growth. Facebook and Twitter will continue to be the big winners in the mobile social space going ahead.
Facebook leads the way in mobile advertising investment with their cost-effective solution to advertisers, non-intrusive native advertising experience to audiences, targeting capabilities, and selection of ad formats.
Twitter is moving up with an increase in spending behind promoted tweets, its Amplify pitches, and improvements to its targeting options like the development of its TV targeting offering. Newspapers continue to command the third highest share of spend, globally 12.8 per cent this year despite continuing year-on-year declines since 2008—3.8 per cent in 2015 and -2.4 per cent in 2016 affected by the permanent change in how consumers seek and access news and entertainment.
OOH share at 7.1 per cent overtakes magazines for the first time this year, with magazine’s share of 6.4 per cent predicted to fall behind radio’s share of 6.6 per cent in 2016. Cinema share of the media pie remains low at 0.5%. However, growth this year is predicted to be a relatively strong at +3.4% vs 2014 with a number of high-profile releases.