In our first excerpt from issue 2 of Global Intelligence magazine, we discuss the rates of adspend growth we forecast around the world. Despite political uncertainty, global adspend is likely to maintain its stable growth rate in 2017. Asia will be the fastest-growing region, with standout performances from India, Indonesia and the Philippines. Latin America is struggling, and MENA continues to shrink.
We forecast global advertising expenditure to grow 4.4% in 2017, the same rate as we estimate for 2016. This is a strong performance, given that the unexpected results of the UK’s referendum on EU membership and the US presidential election have increased political uncertainty and raised the risks of restrictions to international trade. 2017 also faces a tough comparison with the quadrennial year of 2016, when spend was buoyed by the US elections, the Summer Olympics, and the European football championships, as it is every four years.
After 2017 we expect continued steady growth in global adspend – we forecast another 4.5% growth in 2018 and 4.1% in 2019.
Adspend growth is spread unevenly across the world. Adspend is shrinking at 4.9% a year in the Middle East and North Africa amid conflict and low oil prices, while Latin America is growing just 1.7% a year as Argentina, Brazil, Ecuador and Venezuela suffer recession. Asia is leading the way. Growth in China has slowed down markedly over the past few years, but is still 7.0% a year, while there are three markets in Asia – India, Indonesia and the Philippines – where we expect advertising expenditure to grow at double-digit rates each year to 2019. We expect these four markets to contribute 37% of all growth in global adspend over this period.
Advertising in Russia, Ukraine and Belarus suffered from the conflict in Ukraine; the sanctions subsequently imposed between Russia, the US and the EU; and the sharp drop in the price of oil. Adspend shrank 12% across these three markets in 2015, but they avoided collapse and have staged a recovery this year from their reduced base. We forecast 8% growth across these three markets this year, followed by 9% growth in 2017.
Written by Jonathan Barnard, Head of Forecasting Zenith Media