The latest global advertising expenditure forecasts, covering 59 markets across the Americas, Asia Pacific and EMEA, show advertising spend remains healthy in 2016, increasing globally by US$23 billion in 2016 to hit US$548.2 billion, a +4.4% year-on-year increase compared to 2015. Digital is once again the key driver and established star performer of 2017 followed by TV and OOH. Growing by +13.6%, Digital will contribute to US$20.1 billion spend increase next year, representing more than 90% of the total incremental media spend offset by declines in Print.
Television continues to command the highest share of total media spend globally with 41.1% in 2016 and a predicted 40.3% in 2017. Compared to the multiple media types available within Digital, TV is forecast to remain the single largest investment point for advertisers. However since its peak in 2010 at 44.0% share of total spend, TV has been on a slow declining trend with share decreasing by on average 0.5% points annually in the past five years. TV advertising spend is forecast to grow by +3.0% in 2016, supported by high-interest media events including the UEFA EURO 2016 football championship, Rio 2016 Olympics and Paralympics and the US presidential elections. TV advertising spend is expected to grow at a more moderate pace of +2.3% in 2017, slightly revised down from Carat’s predictions in March 2016.
Globally Newspapers continue to be the third largest media type, behind total Digital and TV, with 11.0% share of total advertising spend in 2016 but continue to decline by over one percentage point each year since 2008, to drop to a predicted 9.9% share of spend in 2017. Magazines are experiencing a similar declining trend albeit at a slower rate with a 6.4% share in 2016, falling to 6.0% in 2017. As Digital continues to grow, traditional Print publishers, especially Magazines, are increasingly aiming to broaden their total audience reach across multiple platforms including Digital channels.
Cost effectiveness and flexibility contribute to maintain demand for Radio, predicted to account for 6.4% total share of spend in 2016 and 6.2% in 2017, but with slow growth rate of +2.4% in 2016 and +0.6% next year. OOH is growing relatively strongly at +3.5% in 2016 and +3.4% in 2017, with stable share of spend of 6.9% in 2016 and 6.8% in 2017. Advances in technology, such as the digital transformation of public space and data usage, will continue to shape this media type creating new exciting opportunities for advertisers for more personalisation and relevance. With increased commercial flexibility making it easier for advertisers to adapt spend to the big screen, Cinema is forecast to continue to grow globally by +4.5% in 2016 and +4.6% in 2017.
Globally, Digital media spend is forecast to reach 27.7% share of total media spend in 2016 increasing to 30.2% in 2017, showing an average increase of 2.5% points each year during the past five years. Digital media currently commands the highest share of spend in Sweden (54.5%) followed by the UK (53.6%) and Denmark (50.1%). In 2017 Digital media spend in Australia and the Netherlands is also predicted to tip over the 50% mark for the first time.
Social media spending is forecast to increase globally at a high double-digit rate of +35.3% in 2016 and +28.7% in 2017. Social platforms are consistently improving their ability to gather data and provide marketers with actionable insights to reach and engage withtheir target audiences. Since the launch of Facebook Live for all users, the popularity of live content has steadily increased with consumers watching live video three times longer than pre-recorded content.
The upsurge of Social Media and Mobile is also contributing to the growth of Online Video advertising spend, forecast to increase globally by a strong +41.3% in 2016 and +32.8% in 2017 as brands consistently create and invest in video content to be distributed and curated online. Online Video is increasingly becoming more mobile, with over 117 million people in the US alone watching video on their mobile devices in 2016. This is expected to continue to grow by 6% in 2017, reaching nearly 124 million users. YouTube continues to be a scalable platform for premium video inventory making it easier to embed advertising messages within top performing content.
Programmatic spend is forecast to increase at a rapid rate of +32% in 2016 and further +25% in 2017. Programmatic initially had advertisers focused on cost efficiencies and a more effective performance. While that is still the case, the growth can be attributed to the ability to deliver better business outcomes with access to all types of scalable inventory including premium video and social. Following the negative press that open exchange inventory has been receiving, the industry is now deploying brand safety best practices and adopting a private marketplace strategy that is transacted programmatically. These private marketplaces are not only providing guard rails around brand safety, but also improving viewability metrics and assurances around inventory. Boosted by the considerable rise of programmatically booked inventory, Display (Banners) spend, including desktop and Mobile, is forecast to increase by +12.4% in 2016 and +9.6% in 2017.
Source: Carat Advertising Expenditure Report September 2016