GroupM downgrades 2014 ad-spend forecast

Global ad expenditures will increase 4.6 per cent in 2014 to $531 billion, according to GroupM’s latest spending forecast – a downgrade from the 5.1 per cent growth that the firm initially projected for 2014 back in August. But persistent economic sluggishness in a number of markets worldwide prompted GroupM to issue the downwardly-revised forecast.

In the US, GroupM reconfirmed its earlier projection for next year that spending will be up moderately with a gain of 2.9 per cent to $161 billion. The increase is due largely to spending earmarked for the Winter Olympics in Sochi, Russia.

GroupM’s forecast also predicted that 2013 worldwide ad spending will hit $508 billion, a 3.3 per cent increase over 2012 spending of $492 billion. In the US this year spending will climb just 1.8 per cent to $156.3 billion.

Worldwide there is “local, specific support for ad spending growth” said GroupM Futures Director Adam Smith. But he added that overall spending remains vulnerable to economic turbulence.

That said some markets remain strong. China for example will continue as the largest single source of ad spending growth, accounting for 37 per cent of new dollars in 2013 and a projected 31 per cent in 2014.

“This is a high share of contribution compared to past results,” Smith said.  “A sign of the Chinese market’s maturity is that advertising’s share of the country’s GDP is already on the global average and has barely changed since 2008. We might therefore expect the pace of future advertising investment growth to match GDP growth, which remains around 10 per cent annually.”

The report also indicated that ad spending in the UK is strong and is predicted to grow 7 per cent in 2013 and 6 per cent in 2014.  The UK is the world’s fourth-largest ad market (after the US, China and Japan) and the third-largest contributor to ad growth in 2013 and 2014, Smith said.

Western Europe, however, remains in ad recession with a projected 1 per cent decrease in spending expected in 2013. And next year, said Smith, “We predict Western Europe advertising will return to modest 2 per cent growth but this depends on stability being restored to the troubled Eurozone periphery.”

The GroupM report predicted that investment in digital media would account for 19 per cent of measured ad spending globally this year, or $97 billion, and 21 per cent in 2014 ($110 billion), with respective growth rates of 15 per cent and 14 per cent.

Most of digital’s share growth came at the expense of print media. Television’s share of overall global ad spending remains stable at around 45 per cent.

Posted by on Dec 11 2013. Filed under Ads, Advertising, Articles, Markets, Research.

Search Archive

Search by Date
Search by Category
Search by keyword
Copyright Advanced Television Ltd © 2001-2014