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Ad spending reports recently released show, if anything, similarities looking into the future and certain differences. Media buyer GroupM, part of WPP, adjusted earlier growth projections downward both for all of 2018 and on to 2019. Magna, research house for IPG (Interpublic Group), was much more optimistic.
In Magna’s view, 2018 global ad spending rose by a record 7.2%, considerably more than GroupM’s 4.3%. On to 2019 Magna sees ad spending growing by 4.7%, up from its previous forecast of 4.0%. GroupM’s crystal ball reveals the opposite; ad spending growth rate falling to 3.6% from the previous forecast of 3.9%. Estimates and forecasts in both reports are based on publicly available revenue data from media operators.
Both reports show the sunny side of digital advertising. Magna says global digital spending will rise to half all ad spending by 2020, Google and Facebook stronger than ever. GroupM says digital will take 42% in 2019 with the caveat that regulators are “looking for trouble.” Digital ad spending globally surpassed television a year ago.
There will be little joy, both forecasts say, from the automotive and consumer products sectors any time soon, which are the bottom-line, so to speak, for traditional television. GroupM and Magna differ on growth rates for TV; Magna seeing 3.4% ad spending growth in 2019, GroupM shorts that forecast at 1.2%.
One more thing: both reports see more sunny days for outdoor advertising, largely from election advertising.
The new year - 2019 - looming large ad spending forecasts are rolling in. Advertising executives and their beloved shareholders only want to hear about one thing, after dividends, and that’s growth. Anything else is bad for the business model.
GroupM issued its end of year forecast (December 3), prepared by Futures Director Adam Smith, titled “This Year, Next Year.” This year, in its final view of 2018, ad global ad spending growth rates will be lower than previously forecast, 4.3% from 4.5%. Ad spending growth next year will be 3.6% rather than the previously forecast 3.9%. The difference means about US$4 billion. GroupM is the media buying behemoth owned by advertising behemoth WPP.
With its global perspective, the ad spending report tends to correlate with national gross domestic product (GDP) and otherwise forecast GDP growth rates. Thus, ad spending in China for 2019 is expected to reach US$4.8 billion, followed by the US (US$4.3 billion). The next tier countries are, in order, India (US$1.36 billion), Japan (US$1.34 billion), the UK (US$1.26 billion) and the Philippines (US$0.95 billion). Of course, those forecasts are subject to the hourly whims of other macroeconomic sensitivities like exchange rates, trade wars and interest rates, not to forget consumer confidence. The top ten ad spending nations represent 83% of forecast total, according the the GroupM report.
“Worldwide advertising investment grows slowly but marketing has never moved faster,” offered GroupM chief executive Kelly Clark in a statement. “Automation proliferates; cycles accelerate; talent grows more mobile. The gap between the cost of failure and the value of success grows wider. For advertisers, this underscores the importance of a world view and trusted partners who can help their brands perform where the growth can be found.”
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