Global advertising to reach $547billion in 2017: GroupM
Global advertising is predicted to reach USD547 billion (+ 4.4 per cent) in 2017, with digital’s share to reach 33 per cent, according to the latest figures released by GroupM. In 2016, digital captured 72 cents of every new ad dollar (USD), and TV 21 cents. In 2017, digital will capture 77 cents per new dollar, TV will get 17 cents. The US and China account for half of all net growth in the 2016 and 2017, with China taking back a narrow lead over the US.
The report by GroupM highlighted a variety of economic factors across the globe see another year of modest growth in advertising as brands continue to be pressured for performance in low-growth environments. China and other ‘new world’ countries continue to over-contribute to global growth, but a new normal more modest level of growth has settled in. Digital advertising continues to be the chief beneficiary of growth.
With late-year growth, GroupM China revised 2016 to +7.8 per cent, up from 6.6 per cent predicted earlier. FMCG advertising rose 4.6 per cent in the second quarter year-on-year, much faster than the 2.0 per cent growth forecasted. Continuing urbanisation and solid consumer confidence lend ample support for continued growth, but China no longer boasts recent double-digit rates. Coming off of peak growth, GroupM expects digital advertising in China will grow 29.5 per cent in 2016 and slow to 21.5 per cent next year.
India remains, by far, the fastest growing market in the world’s ten, USD10B plus ad markets. Growth is forecast at 13.8 per cent in 2016 and 12.5 per cent in 2017, with an economy fueled by low interest rates, sustained urban demand and the impact of key reforms.
GroupM’s Futures Director, Adam Smith explained, “Ad growth has shadowed the global economy’s long, low and level recovery cycle since 2010. These new forecasts emphasize the ad story of our times is however structural, not cyclical. Twenty years on from the internet becoming a measured ad medium, digital remains the engine of advertising growth and disruptor-in-chief of the entire marketing economy. This multiplies options, opportunities and risk. The importance to advertisers of autonomy and diligence has never been higher.”
Speaking on the future of programmatic in APAC, Mr Smith said, “Programmatic stimulates demand. It is not a source of demand. It is a tool which propagates automation and therefore speed; which generates actionable feedback; and which improves accuracy (as long as the human operator enters the correct instructions!). The volume of ad placements made by automated, algorithmic systems has certainly grown, and increased share relative to the ‘service model’ of manual ‘insertion order’ ad placements, but I am afraid I cannot be precise about this. I would not be surprised if the large majority of APAC digital display ad dollar tonnage was invested programatically now. Paid Search always has been. Social media is I believe 100 per cent automated now too.”
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