Global media network Carat’s first forecast for worldwide advertising expenditure in 2016 shows that Indian advertising spend is poised to grow by 11.3 per cent in 2016.
Following the formation of a stable government in 2014 led by Narendra Modi, the economic prospects look bright in India.While Indian advertising spends increased by +8.7 per cent in 2014, as per the agency’s forecast, it is poised to leap by double digits of +11 per cent in 2015.
Carat’s also released its latest forecasts for 2015 and actual figures for 2014, with all markets ring-fencing digital media spending, even when faced with negative economic headwinds.
In the Asia Pacific market, advertising spend is forecast to grow by a solid +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 per cent to +0.9 per cent, alongside a number of other markets including Hong Kong, Taiwan, Malaysia and Vietnam. Growth is expected to pick up pace in 12 out of the 14 markets in 2016 with growth overall of+5.8 per cent in 2016.
Based on data received from 59 markets across the Americas, Asia Pacific and EMEA, Carat’s global advertising expenditure forecast showsthat digital media, with a predicted $17.1 billion or +15.7 per cent increase in spend in 2015, is outpacing previous Carat predictions from September 2014. Powered by a dramatic rise in mobile ad spending globally of +50 per cent and online video of +21.1 per cent predicted in 2015, Carat forecasts that digital will, for the first time, account for more than a quarter of all advertising spend in 2016 with a market share of 25.9 per cent.
From a global perspective, Carat forecasts that in 2015, advertising spend across all media will increase by $23.8 billion to reach $540 billion, accounting for a +4.6 per cent year-on-year increase. Market optimism continues into 2016 with Carat’s first forecast for the year predicting a year-on-year global advertising growth of +5.0 per cent.
Carat Advertising spend forecast -March 2015
Digital media spend continues to be the star driver of growth in the global advertising market, with a predicted $17.1 billion increase in spend in 2015 corresponding to a 15.7 per cent year-on-year growth rate, outpacing previous Carat predictions from the September 2014 report.New predictions for 2016 highlight that digital will continue to grow at double-digit levels, at 13.8 per cent, and will account for more than a quarter of all advertising spend globally.
Trend Highlights from the report:
·Digital’s unwavering positive trajectory is being powered by a dramatic rise in mobile, online video, social media and programmatic spending. Carat predicts that in 2015, global mobile spend will increase +50 per cent, and online video will be up +21.6 per cent. US programmatic display advertising spending is predicted to grow +137 per cent to reach $10 billion this year, accounting for 45 per cent of the US digital display ad market.
·Digital media spend is being ring-fenced by advertisers even in markets with significant negative economic headwinds.In Central & Eastern Europe for instance, while total advertising spend is predicted to decrease by 2.2 per cent this year, digital media will see a double-digit growth of +12.9 per cent. Digital media is the only media expected to grow in this region this year.
·Carat’s first advertising expenditure forecasts for 2016 show elevated confidence in the advertising market, a robust +5 per centgrowth despite a still-recovering economic climate boosted by a year of events- the UEFA European Football Championships, Rio 2016 Olympic Games and US presidential elections.
·Global forecasts for 2015 have been revised down from the +5.0 per cent previously forecast in the September 2014 report, to +4.6 per cent. This is due to a reduction in advertising spend predictions in key markets including Russia, Japan and Brazil.
·The recovery in Western Europe has driven a second consecutive year of growth in 2015, predicted at +2.8 per cent. This follows a +2.3 per cent increase in advertising spend in the region in 2014. Growth is driven by the UK market, which is predicted to grow strongly by +6.4 per cent, and Spain by +6.8 per cent following the improved economic climate and consumer sentiment there. Greece (+8.0 per cent), Ireland (+5.7 per cent) and Portugal (+9.4 per cent) are also showing relatively high growth rates this year recovering after suffering severely from the global economic recession. Growth of advertising spend in Western Europe in 2016 is forecast to continue at the predicted level for 2015 of +2.8 per cent.
By media, whilst Digital is the star performer in terms of growth, achieving higher that predicted levels in 2014 of +17.4 per cent and accounting for 21.7 per cent of market share, TV will continue to command the majority of market share for the foreseeable future, reaching 42.7 per cent in 2014, and is predicted to grow by more than +3 per cent year-on-year in 2015 and 2016. The steady decline in Print is expected to continue, however Out-of-Home is now positioned as the second fastest growth media, behind Digital, with a global market share of spend of 7.1 per cent. For the first time, Out-of-Home is predicted to outpace Magazines global share of advertising spend, with Magazines forecast to achieve 6.9 per cent market share in 2015, and with continuing declines for this media, it is predicted to fall behind Radio for the first time in 2016.
Commenting on the Carat Advertising Expenditure forecasts, Dentsu Aegis Network, CEO Jerry Buhlmann said, “The strength of Digital continues to dominate discussions and the new distribution of spending. With a quarter of the global population now owning and relying on their smartphones daily, they are our second brain in our hands. Mobile dominates the way consumers access information, view content, browse products and purchase goods and this is reflected in the innovative services and approach we are discussing with our clients.
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.
Growth in digital spend is high in all regions. The highest in Asia Pacific at +20.1 per cent in 2015, followed by an impressive +16.4 per cent in North America and +16.2 per cent in Latin America. Even in Central & 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. In Western Europe growth is in high single digits (+9.8 per cent) this year.
Mobile spend is notably rising dramatically 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. With the rise in smartphone ownership rates and data usage, mobile is playing a huge role in the way consumers access information, view content, browse products and purchase services and goods.
Carat is seeing 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, which is holding back investment in mobile is the difficulty in proving the ROI for more traditional businesses. Much of the early investment in mobile advertising has been amongst pure-play, app economy brands and business for whom there is an easily demonstrable ROI for investing in mobile.
Mobility is the primary reason behind social’s explosive growth. Facebook and Twitter will continue to be the big winners in the mobile social space. 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 such as the development of its TV targeting offering. One of its big plays this year is the introduction of Promoted Video for advertisers – a new way for brands to post videos that users can play in their timelines with a single tap.
Online Video demonstrates continuing strong growth, +21.6 per cent forecast for 2015, with growth partly driven by a shift of investment away from TV. Expectations are particularly high for original content. In the US, nearly half (48 per cent) of online video budgets will go to ’made for digital’ video.
Display spends including Video and Social is forecast to increase by 15.8 per cent in 2015. However it is ‘Search’ that continues to command the highest share of total Digital spend at 45 per cent, with growth of+12.6 per cent this year and +11.5 per cent in 2016.
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 share of spend above the global average in APAC and C&EE. There are indications, however, of TV’s share slowly eroding as it has decreased by 1.2 per cent points over the past five years. Growth was boosted last year by a slew 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.