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Global ad spends to grow 4.3% in 2019, but Internet ad spends to decline: WARC

New forecasts based on data from 96 countries by WARC, the international marketing intelligence service, predict a 4.3 per cent rise in global advertising spends this year, pushing total investment to over $616 billion. This follows on from a 5.4 per cent rise in 2018 – the strongest growth since 2011 – according to WARC’s latest Global Ad Trends report. 

Despite healthy top line growth, the research suggests that total internet ad spend – inclusive of desktop, mobile and tablet – will decline by 7.2 per cent this year beyond the Google and Facebook ‘duopoly’. Conversely, ad income for the two online giants is expected to rise 22 per cent to $176.4 billion, equating to a combined share of 61.4 per cent of the online ad market (up from 56.4 per cent in 2018). 

James McDonald, Data Editor, WARC, and author of the research, commented, “While advertising investment is stable at the top line level – maintaining a 0.7 per cent share of the global GDP since 2011 – the market’s undercurrents have changed dramatically in recent years. The amount of ad money available to online publishers beyond Google and Facebook is now in decline, and the repercussions are potentially far-reaching, with several high-profile announcements of job cuts seen among online publishers already this year. Print publishers have already been severely hit by the migration of ad dollars online, and while traditional media, excluding print, have fared admirably to date, their collective take of ad investment is also trending downwards.” 

Internet is the driving force in global advertising growth, with spends expected to rise 12.1 per cent to $287.4 billion worldwide this year. This would give internet a 46.7 per cent share of media spends globally, but in the US – the world’s largest ad market – internet is expected to account for over half (54 per cent) of all media spends for the first time this year. 

Within internet, mobile ad spend is expected to rise 21.9 per cent to reach $165.7 billion in 2019, placing it as the second-largest ad channel worldwide across 96 markets; however, across WARC’s 12 key markets – Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Russia, UK, US – mobile is predicted to overtake TV to become the largest ad channel this year. 

Globally, TV will remain the largest single advertising medium in 2019, attracting $195.5 billion, though this represents a 1.3 per cent dip from 2018. Despite this, TV spends will have grown 0.4 per cent each year on average since 2011. 

Print continues to lose share, with a further dip of 9.5 per cent predicted in 2019. Legacy news publishers in particular are feeling the impact, with many looking to diversify their businesses to make up for lost ad revenues. 

Out of home (OOH) is benefitting from the increasing penetration of digital sites in advanced markets, with digital out of home (DOOH) expected to account for all of the 2.3 per cent growth in OOH this year (as it already does in the UK). 

Elsewhere, radio ad spend is forecast to grow 1.0 per cent to $32.5 billion this year, following on from a 1.2 per cent rise in 2018. Cinema is expected to be the only ad channel other than mobile not to lose share of global advertising spend this year; cinema spend is expected to rise 7.7 per cent to $4.7 billion. 

Trends by region 

North America: Total market growth forecast at 3.7 per cent this year, following an estimated 6.0 per cent rise in 2018 (buoyed by the US midterms and brand spend during the Winter Olympics). 

Asia-Pacific: Growth has been relatively strong since 2011, with an increasingly digital China accounting for near half of all ad spends. A 5.8 per cent rise is predicted for the region this year. 

Western Europe: The region recorded the strongest growth in 2018, at 9.2 per cent, though this is expected to ease to 3.5 per cent in 2019. 

Central & Eastern Europe: The region is expected to record the strongest growth this year, at 10.6 per cent, driven by a strengthening Russian market. 

Latin America: The region is heavily susceptible to the strength of the US dollar, which resulted in an 8.3 per cent decline in ad spends last year. A rise of 3.8 per cent is forecast for 2019. 

Middle East: Markets in the region have been severely hit by the sharp falls in the price of oil, particularly in Saudi Arabia and the UAE. As such, the region has been in decline since 2015 and this trend will continue in 2019. 

Africa: Regional growth is largely dependent on South Africa (44.2 per cent of the total), which entered a technical recession in 2018. A rise of 4.3 per cent is forecast for Africa in 2019. 

Global ad spends outlook summary 

  • 3 per cent growth forecast for global ad spends in 2019, pushing the total to $616 billion.
  • 4 per cent estimated rise in global ad spends in 2018 – to $590 billion – the best performance since 2011.
  • 2 per cent forecast decline in internet ad spends, excluding Google and Facebook, this year.
  • 3 per cent global ad dollars to be invested in traditional media this year.
  • 4 per cent Google and Facebook’s combined share of internet ad spends this year.
  • 3 per cent share of online display ad spends traded programmatically this year.
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