Go to Admin » Appearance » Widgets » and move Gabfire Widget: Social into that MastheadOverlay zone
Big brand budgets and quadrennial events such as the Olympics, European Football Championship and US Presidential Election will drive 2016’s global advertising revenue growth to $532 billion (€508bn) according to findings from critical information, analytics and solutions source IHS Markit’s annual Global Advertising Trends report.
“The advertising industry is about to turn the corner thanks to the global economy getting back on track,” said Eleni Marouli, principal analyst, IHS Technology, and report author.
Advertising revenue will grow 7.1 per cent in 2016 to $532 billion. Strong growth in global real private consumption also buoyed advertising revenue as brands tried to take advantage of heightened consumer spending. Advertising revenue accounted for 0.69 percent of global GDP in 2016, up from 0.66 percent in 2015, the report said.
The top 10 markets make 75 per cent of the global revenue figure, accounting for the lion’s share of global advertising revenue, according to Marouli. “However, their collective power has dropped due slowdowns in the Chinese and Brazilian economies, which were the rising stars in the top 10 in 2015,” she added.
Four out of the five fastest growing countries in 2016 were in Africa. “Ghana and Kenya have been high on the list of many media companies’ expansion plans, and we are seeing growth above 20 per cent,” Marouli advised. “These markets are still growing from a low base, but the sheer size of their populations means they are becoming interesting targets for big brands.”
TV was the number one medium globally for advertising revenue, accounting for $192 billion, or 36 per cent, of global revenue. “Despite the incredible growth of online giants like Facebook, Google and Snapchat, the TV market continues to benefit from big brand budgets,” Marouli advised. “Quadrennial events such as the Olympics, the European Football Championship and the US elections helped keep TV on top.”
However, revenue from online advertising will overtake TV within the next five years. “In some countries such as the UK, online already accounts for almost 50 per cent of total advertising revenue and will only keep getting stronger,” Marouli predicted.
In 2016, online advertising will account for almost $160 billion, or 30 per cent of global revenue. Print advertising sits in third with $101 billion, followed by radio with 8.4 percent of the market and $47 billion in revenue.
In the US, TV advertising revenue will make up roughly 38 per cent of the country’s total; online is just behind with 36 per cent.
In China, online advertising revenue will be 17 per cent greater than TV advertising revenue, a difference of $15 billion.
The most mature markets are mostly high GDP per capita markets, according to the IHS Technology report. Israel topped the list at $719, followed by Switzerland and the US. China generated only $65 per person in advertising, despite being the second largest advertising market. Zimbabwe was the last on the list with $0.002 ad revenue per person per year.
“We expect global advertising revenue will grow to $590 billion in 2017,” Marouli said. “The strongest growth will come from the Middle East and Africa, followed by Asia Pacific, where India and Indonesia will steal the show.”
Developed markets are likely to slow down in an event-light, following the high spending for the Olympics and the US elections, the IHS Technology report said. Online will continue to be the fastest growing medium at 14 per cent, however, a slowdown in the revenue growth of Google and Facebook, is likely as the two are not attracting TV budgets to their online video offerings as fast as they had hoped.