Recently, Carat Media released its latest forecast for global advertising expenditures. The forecast is based on data from 59 markets in the Americas, Asia Pacific, Europe, the Middle East and Africa. Carat's latest global forecast shows that total advertising expenditures will reach US$548.2 billion in 2016, a year-on-year increase of 4.4%. Benefiting from high-profile media events in 2016, including the UEFA European Championship, the 2016 Rio Olympic and Paralympic Games, and the upcoming US presidential election, the global advertising market has flourished.
Advertising spending was reported to have increased in most regions in 2016, with particularly strong growth in North America (+5.0%) and a resurgence in the Russian ad market (+6.2%), countering lower expectations in some markets. Advertising expenditures in the United States are still optimistic. Just one US presidential election is expected to bring about US$7.5 billion in incremental advertising consumption. Therefore, the forecast increase in US advertising expenditures has been revised to 5.0%. Although the growth rate of advertising expenditure in the UK has slowed down after the referendum on leaving the EU, the largest advertising market in Western Europe is still in the UK, which is expected to grow by 5.4% in 2016, exceeding the average growth rate of 2.9% in Western Europe. Despite lower forecasts for ad spend in Brazil and adjustments to China's "new normal" economic landscape, ad growth in Latin America and Asia Pacific remains strong, with growth forecasts of 10% and 3.9% respectively in 2016.
Although advertising expenditures in some markets have declined slightly due to economic fluctuations, global advertising expenditures are gaining momentum and are expected to reach US$570.4 billion by 2017, a year-on-year increase of 4.0%. The continued growth of digital media is its main driving force. As the dominant media among the 13 markets studied, digital media is expected to maintain double-digit growth in 2016, reaching 15.6%, and will further grow to 13.6% in 2017. With people's high demand for mobile media, online video and social media, digital media advertising expenditure is expected to account for 27.7% of global media advertising expenditure in 2016, and is expected to reach 30.2% by 2017.
At the same time, due to the promotion of many high-profile media activities, TV advertising expenditures reached 41.1% in 2016, still accounting for the largest share of total media advertising expenditures. It is expected to maintain a relatively stable growth of 2.3% in 2017, and is expected to account for 40.3% of total advertising expenditures, a slight decline from 2016.
Print advertising spending is expected to continue to decrease by 5.5% in 2016 and will decrease by 4.7% in 2017, in line with expectations. In addition to paper advertising, it is once again confirmed that advertising expenditures in other media all achieved year-on-year growth in 2016, especially theaters (+4.5%), radio (+2.4%), and outdoor advertising (+3.5%). However, the forecast value for 2017 has been lowered.
China is the world's second largest advertising market and is expected to achieve $81.8 billion in advertising spending this year. Over the years, China's economy has shown double-digit growth. China's current growth trend has tended to be flat and stable. In 2016, advertising expenditure increased by 5.7%. As the Chinese market has now entered the "new normal" of the economy, advertising expenditures are expected to increase by around 5.5% in 2017. Other trends in China’s advertising market include:
TV expenditures still account for the majority of total advertising expenditures in the Chinese market, accounting for 53.4% of all media expenditures in 2016 and 51.2% in 2017. However, TV is facing a strong impact from digital media. Coupled with the slowdown in growth (1.7% growth in 2016 and 1.3% growth in 2017), TV's share of China's advertising expenditures has shown a downward trend since 2010, with an annual decline of 1% to 2%.
Digital media is the second largest media form in China, and is expected to account for 25% of all advertising media expenditures in 2016, and will show double-digit growth in 2016 and 2017, with increases of 25.9% and 21.4% respectively.
Mobile media is the driving force behind the growth of overall digital media spending. Mobile media spending is expected to grow by 47.1% in 2016 and 34.6% in 2017. The number of smartphone users in China will exceed 656 million in 2016. It is expected that mobile media will account for more than 1/3 (34%) of the overall digital media spending in 2017.
Online video is expected to grow by 42.3% and 34.5% in 2016 and 2017 respectively, as professionally produced content will grow exponentially in the market.
Outdoor advertising is the third largest media form in the Chinese market, expected to increase by 4.1% in 2016 and 3.8% in 2017, with subway and airport construction being its main driving force.
On the contrary, print advertising spending is declining year by year. Newspaper spending is expected to decrease by 14.9% in 2016 and 16.2% in 2017. Magazine spending is expected to decrease by 12.2% in 2016 and 13.1% in 2017.
ANNA