Global ad market lifts and strengthens despite Brexit concerns

Zenith upgraded its forecasts due to stronger than expected growth in the the US, the Philippines and Western Europe.

The global ad market has strengthened over the past few months, mainly due to the resilient US consumer, and any impact from the Brexit vote has been limited and confined to the UK, according to a new report.

Zenith said global advertising expenditure will grow 4.4 per cent this year to reach US$539 billion, ahead of the 4.1 per cent previously forecast in June, according to Zenith’s Advertising Expenditure Forecasts.

Zenith head of forecasting, Jonathan Barnard, said it expected the global ad market to strengthen further in 2017 and 2018. The agency upgraded its forecasts due to stronger than expected growth in the the US, the Philippines and Western Europe.

“This upgrade is mainly the result of stronger-than-expected growth in the US, where a strong labour market has encouraged consumers to increase their expenditure, and advertisers have fought harder for their share of the expanding market,” the report stated.

The US network TV is also expected to return to growth this year at 1 per cent, after shrinking 5 per cent last year, thanks to new spending by pharmaceutical and consumer packaged goods companies and a strong upfront. Zenith also predicted social media will accelerate from 32 per cent growth last year to 35 per cent growth this year, as advertisers take advantage of new formats, such as in-feed video, and the transition to mobile internet consumption continues.

Meanwhile, ad spend in the UK market will continue to grow despite concerns that Brexit could negatively impact the market.

“Although the vote for ‘Brexit’ in the UK’s EU referendum came as a shock to many in the market, so far advertisers have reacted calmly, with no widespread budget reductions,” the report stated.

Zenith has now forecast 5.4 per cent growth in ad spend this year, which is fractionally less than the 5.6 per cent forecast just before the vote.

“Most of the impact that Brexit will have on the UK ad market will come in the long term. The UK’s new terms of trade with the EU and other countries – whatever they turn out to be – are likely to restrict flows of trade and investment in comparison with the pre-Brexit status quo, leading to slower economic growth and slower growth in advertising expenditure,” the report said.

Zenith has also made slight upgrades to its ad spend forecasts for Asia-Pacific, with the region now expected to grow 6.3 per cent this year, up from our previous forecast of 6.2 per cent, thanks to heavy political spending in the Philippines in the run-up to the May 2016 elections.

Another finding is that mobile advertising is expected to take over from desktop even faster than expected. In June, Zenith forecast mobile advertising would overtake desktop in 2017. While that is still expect that to happen, the forecasts have been upgraded for mobile growth for this year from 46 per cent to 48 per cent, and next year, from 29 per cent to 33 per cent.

Zenith also said it expected mobile ad spend to exceed desktop by US$8bn in 2017, up from the US$2bn predicted in June. By 2018, the group said mobile should account for 60 per cent of all Internet advertising, up from our previous forecast of 58 per cent.

Additionally, desktop advertising is expected to take a hit, shrinking more than newspapers or magazines to 2018. Decline of desktop advertising is predicted to gain momentum over the next few years, with desktop ad spend falling by 0.8 per cent in 2016, 2.9 per cent in 2017 and 7.4 per cent in 2018.

Between 2015 and 2018, Zenith said desktop ad spend will shrink by US$10.7 billion, more than the other two declining media – newspapers, which will shrink by US$9.6 billion, and magazines, which will shrink by US$4.4 billion.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+: google.com/+CmoAu


Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Blog Posts

Designing for a cashless society

More movement has been made toward a cashless society recently, and already we are starting to see enormous implications across our society.

Katja Forbes

Founder and chief, sfyte

Setting advertising objectives for financial performance

I’ll often be talking to clients and at some point say, ‘the most important thing is justifying price’. Then moments later, ‘the most important thing is increasing the size of your customer base’.

Kyle Ross

Strategist, TRP

5 common mistakes to avoid in scalable customer experience

CX is about future-proofing your business by ensuring that your commercial model is always looped into your customers' needs, perceptions, values, beliefs, motivators, and detractors.

Tom Uhlhorn

Founder and strategy director, Tiny CX

Thanks for writing about chatbots. Definitely bots have the exciting future when it comes to customer engagement, transactional and conve...

Giridhar Prathap Reddy

Australian Open chalks up strong ticket sales with chatbot

Read more

Hello, where are the explanations of all the levels explained? I'd like to review this with a couple of colleagues. Thanks.

Melinda Gonzalez

CMO launches CMO CX, debuts customer experience maturity assessment

Read more

A great and accurate commentary - today we rarely get true personalisation. On web journeys cookies or logins remember who we are, what w...

Ian Moyse

Salesforce: Personalisation is a long way off what consumers now expect

Read more

Very nice information !! We provide almost every indian satta matka games with fast results. Online Matka play becomes easy with genuine ...

rsgame

Image intelligence:10 must-see infographics for marketers

Read more

One of the best example for email marketing!!This post has completely explained the power of email marketing and how it is beneficial to...

Abhinav Mohan

How email marketing automation is helping this Aussie electrical wholesaler enter the digital age

Read more

Latest Podcast

More podcasts

Sign in