Carat forecasts healthy global ad spend growth, to hit $548.2 bn in 2016

Carat’s latest global advertising expenditure forecasts, covering 59 markets across the Americas, Asia Pacific and EMEA, show advertising spend remaining healthy in 2016, increasing globally by $23 billion in 2016 to hit $548.2 billion, a +4.4 per cent year-on-year increase, compared to 2015.

Despite a minor 0.1 per cent decline from the +4.5 per cent forecast in the Carat Ad Spend report from March 2016, the outlook of the advertising market continues its positive momentum in 2016 fuelled by a buoyant year with major media events, including the US presidential elections, the Rio 2016 Olympics and Paralympics, as well as the UEFA EURO 2016 football championship.

In particular, growth in 2016 is driven by robust performance in the US (+5.0 per cent) and continued recovery in the C&EE region (+4.7 per cent), countering slightly more moderate growth in the UK and Spain, as well as moderating forecasts in China and Brazil.

The advertising market is set to continue the positive momentum in 2017 with steady +4.0 per cent year-on-year increase forecast, to hit $570.4 billion globally. Digital is once again the key driver and established star performer of 2017: Growing by +13.6 per cent, Digital will contribute to $20.1 billion spend increase next year, representing more than 90 per cent of the total incremental media spend offset by declines in Print.

In Asia Pacific, the buoyant Indian advertising market continues to lead growth prospects of +12.0 per cent in 2016 and +13.9 per cent in 2017. Conversely, more moderate growth remains in China where advertising spend is expected to increase by +5.7 per cent in 2016 and +5.5 per cent in 2017, as the market adjusts to a ‘new normal’ economic landscape.

Forecasts continue to be extremely bright in India, the highest spending and fastest growing advertising market globally. Spend is expected to accelerate by +12.0 per cent in 2016, a buoyant year with multiple media events taking place in the market, including the T20 Cricket World Cup, the Indian Premier League (IPL) as well as the state elections.

Retaining its position as one of the fastest growing world economies with real GDP growth of +7.5 per cent in 2016, the positive advertising outlook for the Indian market is expected to continue in 2017, growing further by +13.9 per cent. Additional media-related statistics include:

India is one of the few large markets where all traditional media platforms still show positive growth. Holding the highest share of spend of 38.5 per cent in 2016 and 38.0 per cent in 2017, TV is forecast to grow by +12.3 per cent in 2016 and +12.5 per cent in 2017 driven by investment from FMCG brands and eCommerce companies.

Newspapers still represent the second largest media type with 35.7 per cent share of total spend in 2016, and this is expected to continue to grow by +10.5 per cent this year and +10.8 per cent in 2017.

As in other markets, Digital is the fastest growing media type in India (+31.5 per cent in 2016 and +39.6 per cent in 2017), but its share of spend (8.9 per cent expected in 2016 and 10.9 per cent in 2017), still remains relatively low compared to the resilient traditional media.

India is gradually transitioning from a “mobile first” to a “mobile only” country.  Mobile spend is forecast to grow by +27.2 per cent in 2016 and +35.1 per cent in 2017.

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