Global advertising expenditure growth to accelerate to 4.7 per cent in 2018, reach US $572 billion

WARC, the international marketing intelligence service, has released its latest monthly Global Ad Trends report, digesting up-to-date insights and evidenced thinking from the worldwide advertising industry.

Focusing on advertising expenditure in 96 markets, this latest report includes key trends in spending patterns by media and geography since 2009, a round-up of 2017, as well as full-year projections for the 2018.

Global growth is forecast at 4.7 per cent to a total of US$572 billion this year, boosted by the PyeongChang Winter Olympics, FIFA World Cup, US mid-term elections and reduced dollar volatility in emerging markets.

Growth in North America (+5.0 per cent), Asia-Pacific (+6.0 per cent) and Western Europe (+2.6 per cent) is expected to hasten in 2018, while Central and Eastern Europe (+8.4 per cent) and Latin America (+7.0 per cent) will continue to expand at a strong rate. Advertising spend across the Middle East and Africa is expected to dip once more (-4.1 per cent), though at a lesser rate than in previous years.

Global advertising expenditure rose 3.0 per cent to US$546bn in 2017

Global advertising spend rose 3.0 per cent to US$546bn in 2017, according to new projections based on data for 96 markets. The growth rate in 2017 represents a slowdown from the 3.8 per cent rise recorded in 2016, partially owing to weaker growth in the United States (which accounts for 34 per cent of the value of advertising worldwide).

The slowdown in the US contributed to an easing in growth across North America as a whole. Adspend in the region rose 3.3 per cent to US$199.6bn in 2017 (compared to 8.0 per cent growth in 2016). Growth in the world's second-largest ad region, Asia-Pacific, also cooled (+4.3 per cent to US$162.8bn in 2017 vs +5.3 per cent in 2016) as growth in Japan (23 per cent of the regional total) was muted by a weaker Yen. The Chinese ad market – which accounts for 41 per cent of Asian and 12 per cent of global advertising spend – expanded by 4.7 per cent to $66.7bn last year, propelled by rapidly increasing spend on mobile ads.

North America and Asia-Pacific account for two-thirds of global advertising expenditure combined. Outside these regions, fortunes were mixed. Spend in Western Europe (20 per cent of the global total) rose by just 0.2 per cent to US$109.9bn in 2017, matching the rate recorded in 2016. Conversely, advertising spend in Central and Eastern Europe grew by 14.5 per cent to US$21.2bn in 2017, making it the fastest-growing region last year.

The Latin American ad market returned to growth (+9.4 per cent to US$31.2bn in 2017) after a 4.4 per cent decline in 2016, but advertising spend in the Middle East and Africa fell for a second year (down 10.5 per cent to US$21.7bn in 2017 versus an 11.3 per cent dip in 2016) due to political instability and the impact of a weaker trade price on oil-reliant economies.

Mobile only medium to gain share of global advertising expenditure in 2017, and is now the world's second-largest ad channel

Mobile increased its share of global advertising expenditure by an estimated 5.9 percentage points (pp) to 20.6 per cent in 2017, equivalent to US$112bn (up 44.5 per cent year-on-year). Approximately 45 per cent of mobile advertising spend is based in the US, where US$156 dollars per capita is spent on mobile ads.

Mobile is thought to have been the only media channel to have gained share year-on-year. Estimates indicate that mobile overtook desktop internet for the first time in 2017, as spend on desktop ads was thought to have taken a share of 18.3 per cent (down 1.9pp year-on-year).

The largest media channel, TV, is estimated to have registered a 1.4pp dip in 2017, taking a share of 36.5 per cent of the global adspend total (US$199.5bn). Print continues to lose share, the channel was down an estimated 2.2pp in 2017 to 12.5 per cent. Since 2009, print has recorded a massive 21.5pp decrease in its share of global adspend, and has lost an average US$11.5bn each year since 2012.

Out of home's share dipped by 0.1pp to 5.7 per cent in 2017, while cinema's share held at 0.7% and radio was down by an estimated 0.2pp to 5.7 per cent.

James McDonald, Data Editor, WARC, said, "2018 should be a stellar year for global advertising, with ad investment set to grow at its strongest rate since the post recovery years of 2010 and 2011. All global regions, with the exception of the Middle East, are expected to register growth, supported by key quadrennial events – notably the Winter Olympics in South Korea, the FIFA World Cup in Russia and the US mid-term elections."

He added, "Mobile is now a key driver of global growth, and was the only channel to gain share of spend in 2017 – it now accounts for one in five ad dollars worldwide. Nevertheless, traditional media still attract 61 per cent of global ad investment, and TV and out of home will be among the main benefactors of increased brand and political campaign spending this year."

A round-up of advertising expenditure trends and media projections

• 3.0 per cent rise in global adspend last year, to a total of US$546bn
• 4.7 per cent growth forecast for global ad spend this year, reaching US$572bn
• 18 per cent  – search's share of global adspend in 2017
• 40 per cent  average growth rate in online video spend since 2013
• 45 per cent  of global mobile ad spend in 2017 was based in the US
• 61 per cent  of global ad spend in 2017 (US$334.1bn) invested in traditional media

Other new key media intelligence on WARC Data

• More ad dollars go to TV networks (US$199.5bn) than the Facebook/Google duopoly (US$133.2bn)
• TV ad spend outweighs online video by a ratio of 6:1
• At US$65.8bn, sponsorship will overtake print to become the fourth-largest ad medium in 2018

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