Daily Management Review

Research Claims while 2016 Sales Reached Nearly $500bn, Global Advertising Spend to Slow in 2017


12/05/2016




Research Claims while 2016 Sales Reached Nearly $500bn, Global Advertising Spend to Slow in 2017
Noting the lowest growth rate that has been recorded since the 2008-09 global financial meltdown, a slowing global ad spending in 2017 is likely continue due to the economic and political uncertainty that has characterized 2016 which saw a slowdown in ad revenues.
 
According to a report by MAGNA, IPG Mediabrands' research arm, compared to a global ad revenue growth of 5.7 percent in 2016, the global media owners' net ad sales are forecast to grow by 3.6 percent in 2017. In 2016, $493 billion was the total spent by brands globally on advertising in 2016.
 
The most significant growth slowdown in ad revenues would happen in North America in 2017 despite the fact that 2016 was a bumper year for ad sales in the region where the total ad spending was $191 billion and had been boosted by the Olympic Games and US Election campaigns ($3.5 billion).
 
While Central and Eastern Europe will both grow by around 5.6 percent, a similar pace to 2016, Western Europe is expected to see a noticeable drop in growth in 2017 to 2.4 percent due to the uncertainty and the fall out of post-Brexit and the general elections in France and Germany.
 
Noting a figure that is similar to this year’s figure, a growth rate of 5.4 percent is expected to happen in the Asia-Pacific market. ion the other hand, helped by the 2016 Olympic Games and a general economic recovery, the highest growth rate is expected to be seen in Latin America where it is expected that the growth rate in ad spending would be at 6.2 percent.
 
MAGNA states that this growth is still "faster than what should be expected in the current economic environment" even though the global growth rate in ad spend is set to slow next year.
 
With Facebook and Google together controlling 54 percent of the global digital advertising market, up from 44 percent last year, this growth would be driven primarily by an increasing spend on search marketing and social media, the research report suggests.
 
Programmatic technology is forecast to be worth $42 billion globally in 2020 and is seen as "a key driver of media-buying activity and innovation," says MAGNA. Programmatic technology automates online ad placement. Preceding China, Japan and the U.K., the U.S. is the largest market for programmatic advertising.
 
Making up 50 percent of the market, MAGNA expects global digital ad sales to grow to $299 billion by 2021. While China is likely to spend 59 percent and the U.S. 56 percent, Australia is likely to be a big spender here, with 65 percent of its ad budgets going on digital by 2021.
 
(Source:www.cnbc.com) 






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