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GroupM revises global 2013 ad spending forecast downward to 3.4% growth

US ad spending expected to rise only 1.8 per cent. The final tabulation for 2012 revealed ad spending in measured media hit $490 billion, a 3.6 per cent increase over spending in 2011  

BestMediaInfo Bureau | Delhi | August 16, 2013

GroupM has revised its biannual worldwide measured advertising spending forecast for 2013 downward to $507 billion reflecting a 3.4 per cent growth rate compared to the 4.5 per cent rate predicted in December of last year.

The revised forecast was published in ‘This Year, Next Year’, which also included a final tabulation for 2012 that revealed advertising spending in measured media having hit $490 billion, a 3.6 per cent increase over spending in 2011.

Also, in its first prediction for 2014, the 75-country forecast predicted that global ad spending will increase 5.1 per cent compared to 2013, representing $533 billion. It was prepared by GroupM Futures Director Adam Smith.

For the US market, the report said advertising investment in measured media would grow only 1.8 per cent in 2013 to $156 billion, up from $153 billion in 2012.  For 2014, the forecast is a 2.9 per cent hike in spending to $161 billion.

“We estimate marginal growth in advertising spending in 2014 on a comparable component basis,” said Rino Scanzoni, GroupM’s Chief Investment Officer for North America. “However, the Sochi Winter Olympic games will add an additional 50 basis points to the growth rate with funding coming primarily from existing budgets.”

Regarding worldwide spending, Smith said the downward revision to growth in 2013 ad spending could be attributed primarily to continued economic discord in the Eurozone – the same reason that led GroupM to revise its 2012 forecast downward.

“The Eurozone periphery, specifically Italy, Spain, Portugal, Greece and Ireland, is once again the main reason for the decline,” Smith said. “Stabilisation is elusive. We now expect this group to record an 11 percent fall in measured advertising in 2013.”

The revised forecast for Western Europe predicts a 2.4 per cent decline in spending compared to 2012 to $97 billion. Spending in 2014 is expected to rise only 1.8 per cent to $99 billion. Smith added that the Eurozone periphery accounted for 7 per cent of global advertising investment before the economic crisis and now accounts for only about 3 per cent although this group's nominal GDP changed little during the same period.

The study is part of GroupM's media and marketing forecasting series drawn from data supplied by parent company WPP's worldwide resources in advertising, public relations, market research, and specialist communications.

Digital spending remains steady: The report predicted that investment in digital media would account for 19 percent of measured ad spending globally this year ($95 billion). For 2014, digital ad spend is expected to rise by 14 percent to occupy a 20 percent share of ad budgets.

Hotspots: Within the industrialising world, China's preeminence as an advertising rainmaker looms ever larger, this year raising 40 per cent of net new global investment, according to the report.  At the same time, there is similar support for sustained advertising growth in Russia.

“Western advertisers' share of investment in both countries remains as substantial as ever, and is even rising, according to standard industry monitoring sources,” Smith said.

Media USD m, current prices
  2012 2013f 2014f
NORTH AMERICA 166,338 169,378 174,158
yoy % 3.4 1.8 2.8
LATIN AMERICA 32,074 34,837 37,838
yoy % 5.3 8.6 8.6
WESTERN EUROPE 99,554 97,133 98,893
yoy % -4.0 -2.4 1.8
CENTRAL & EASTERN EUROPE 19,064 20,430 22,113
yoy % 6.5 7.2 8.2
ASIA-PACIFIC (all) 155,127 166,359 179,947
yoy % 7.6 7.2 8.2
NORTH ASIA 80,362 87,900 97,579
yoy % 10.7 9.4 11.0
ASEAN 12,464 13,728 15,355
yoy % 11.2 10.1 11.9
MIDDLE EAST & AFRICA 18,004 18,884 19,901
yoy % 12.6 4.9 5.4
WORLD 490,161 507,021 532,849
yoy % 3.6 3.4 5.1

Media yoy% adjusted for CPI

  2012 2013f 2014f
NORTH AMERICA 1.4 0.0 1.1
LATIN AMERICA 0.4 4.0 4.2
WESTERN EUROPE -6.0 -4.1 0.0
CENTRAL & EASTERN EUROPE -0.2 0.1 2.6
ASIA-PACIFIC (all) 5.3 4.5 4.2
NORTH ASIA 7.9 6.2 7.8
ASEAN 6.0 5.3 6.7
MIDDLE EAST & AFRICA 5.0 -1.7 0.0
WORLD 1.0 0.8 2.1

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