Global ad spending to grow 6.5% in 2014
The global media advertising economy is set to accelerate in 2014 with revenues estimated to grow by 6.5 percent while Asia Pacific is expected to grow at 8.7 percent next year as Vietnam, Indonesia and Philippines lead the region’s growth markets in 2013, according to the latest advertising revenue forecasts shared by IPG Mediabrands’ Magna Global yesterday.
The projected global revenue of $521.6 billion will become the strongest year-on-year growth recorded since 2010, following the 2009 recession. Covering 72 countries, the Magna Global research estimated a 3.2 percent growth in this year’s global advertising revenues and said that this will continue to grow as the global economy is expected to speed up next year. The study also cited the role of mobile, social networks and programmatic trading as drivers of growth.
Asia Pacific, growing at an average of 6.3 percent this year in advertising revenues, is seen to grow at 8.7 percent in 2014.Vietnam leads the strongest growth markets in APAC with 27 percent growth in 2013, followed by Indonesia and the Philippines at 16 and 13 percent, respectively. The region represents approximately 30 percent of total global spend.
Television still tops the media category, growing at 5.1 percent in 2013 from 4.3 percent in 2012. But while it currently holds 42.3 percent of the total spend in APAC region its share will fall below 40 percent in the next five years as digital advertising continues to grow.
By the end of 2013, Magna Global predicts digital media to grow at 22. 4 percent in APAC. With a CAGR (compounded annual growth rate) of 17. 3 percent through 2018, digital media is expected to have an increase of 34 percent share of total spend from 2013’s 22.6 percent.
Newspaper and magazines are projected to lose ground with a CAGR of less than 1.4 percent and less than 3.1 percent, respectively through 2018. Print will only represent 21.8 percent of total ad spend in 2013, down from 32.2 percent of total spend as recently as 2008.
The upcoming US mid-term elections and the Sochi Winter Olympics and Brazil Soccer World Cup are expected to generate ‘incremental advertising spend in most markets,’ driving the global growth of television advertisements at 7.7 percent, as opposed to the 2013 number of 1.8 percent.
At the same time, revenues from digital media advertising will continue to grow at 15.5 percent. Digital media was the fastest growing media category this year, increasing 16 percent and getting the 24 percent of the global market share. Within digital media, social networks generated more than $9 billion of spend in 2013, a 58 percent growth. The study also recognized social media as one of the catalysts for the increase in mobile advertising revenues, which almost doubled in size to reach $16 billion, getting 14 percent of global Internet advertising.
The advent of programmatic trading has also affected digital media, with programmatic spending reaching $12 billion globally this year. This includes real-time bidding and other automated platforms for video and display inventory buying.
“The combination of an improved economic environment and stronger-than-usual cyclical drivers is bound to unlock marketing and branding budgets in 2014. This will primarily benefit television and digital media where new formats and opportunities are being explored for activation and branding campaigns,” Magna Global EVP and Director of Global Forecasting Vincent Letang, said in a statement.