Warc cuts 2015 global adspend growth forecast to 2.3%; India to record strongest growth

As per Warc's latest International Ad Forecast, India is predicted to record the strongest annual increase in adspend in 2015 at 16.1 per cent. In 2016, too, India will continue to increase advertising spend at the fastest rate (12.4 per cent)

BestMediaInfo Bureau | Delhi | September 24, 2015

Warc, the marketing intelligence service, expects global advertising spend (based on 12 major markets) to increase by 2.3 per cent at current prices in 2015, according to its latest International Ad Forecast. This represents a downgrade of 2.5pp from the 4.8 per cent growth forecast in its previous report in December. Warc anticipates further growth of 4.5 per cent in 2016.

If inflation is taken into account, global adspend in real terms is expected to rise by 1.2 per cent this year and a further 2.4 per cent in 2016. The 12 markets studied comprise 75 per cent of all advertising expenditure tracked by Warc.

India (16.1 per cent) and China (9.0 per cent) are predicted to record the strongest annual increases in adspend in 2015, however both are susceptible to high levels of inflation.

The UK then follows with estimated growth of 6.6 per cent this year. Russia (-13.1 per cent) and France (-0.2 per cent) are the only markets in which Warc expects spends to decline.

The US, the world's largest ad market, is expected to see adspend rise 1.4 per cent this year after a downgrade of 3.0pp since the last report. American television is the largest single medium for advertising in the world, and spend hit a record $65.7 billion in 2014. However, without the stimulus of major sporting and political events, and a weak 'upfronts' period earlier this year, Warc forecasts an annual fall in US TV adspend of 3.3 per cent in 2015.

Looking to 2016, Warc expects all markets – with the exception of Russia – to show growth in adspend at current prices. India will continue to increase advertising spend at the fastest rate (+12.4 per cent), followed by Brazil (+7.7 per cent), which should benefit from hosting the Olympics.

By the end of the forecast period, advertising spend across the 12 major markets should total $413.7 billion at current prices. In real terms, after accounting for inflation, the total is $325.3 billion – $8.5 billion below the peak preceding the global economic crisis.

The 2015 outlook has been downgraded for half of the 12 major markets, including the two largest – the US (-3.0pp) and China (-1.5pp). The biggest single cut was for Russia (-15.1pp), which is suffering from low oil prices and decreasing consumer spend.

Internet forecast to become largest medium for advertising in 2016

Across all key markets, Internet adspend will continue to register rapid growth, rising 16.1 per cent and 12.9 per cent this year and next. Conversely, advertising expenditure for TV is expected to fall by 1.9 per cent this year, although these losses will be negated be a forecast 2.5 per cent rise in 2016.

On the current trajectory, Internet will become the largest medium for advertising in 2016. Internet is already the biggest ad platform in six of the 12 major markets.

Rises in ad expenditure for cinema (+3.2 per cent) and outdoor (+0.3 per cent) are also forecast this year, however spend on magazines (-10.4 per cent), newspapers (-9.2 per cent) and radio (-1.2 per cent) is expected to fall.

James McDonald, Data Analyst at Warc, commented, “After a strong rise in global advertising spend last year, the outlook for 2015 is more sobering. With three of the world's largest economies now in recession, and slowdowns seen in the US and China, we expect a degree of caution when it comes to committing ad budgets this year.”

“That said, advertisers have increased spend every year since the 2009 crash, with the influx of money for Internet ads underlining the growing range of options for marketers,” he added.

Info@BestMediaInfo.com

Info@BestMediaInfo.com