Forecast: Global TV ad revenue to slow

GroupM has revised its original predictions from June 2019 for the global advertising market. Despite solid growth in the US and UK, overall conditions have led GroupM’s Global President of Business Intelligence, Brian Wieser, to predict a deceleration in advertising growth this year versus 2018 (+5.7 per cent vs. +4.8 per cent) and in 2020 versus 2019 (+4.8 per cent vs +3.9 per cent).

Much of the sector’s growth is being driven by digital-first brands. As has been seen from the record number of sales from Cyber Monday, digital advertising is increasingly changing the way consumer behave and digest information – it accounts for 52 per cent of the global advertising tracked in the report and 60 per cent of total advertising in markets including China, the UK, Sweden and Denmark.

Altogether, GroupM forecasts advertising growth across more than 37 territories/countries; highlights include:

• Digital companies around the world like Alibaba, Alphabet, Amazon, Booking.com, eBay, Facebook, IAC, JD.com, Netflix and Uber account for $36 billion in spending, accounting for a majority of the world’s growth in spending on advertising.
• Estimates for digital advertising are about $230 billion in 2019. Google and Facebook are likely to generate somewhere around $175 billion on a net basis, while other large sellers of digital advertising—including Microsoft, Amazon, Verizon, Twitter and Snap—will generate approximately $25–30 billion in digital ad revenue this year.
• The US and UK are helping to raise global averages, as the US accounts for nearly 40 per cent of the world’s total with a still-robust ad market, and the UK still growing at a remarkably fast pace (up +44 per cent since 2013).
• China is still more than two times the size of the third largest market, Japan, but macroeconomic concerns contribute to growth predictions of only +3.7 per cent in 2019 and 1.4 per cent in 2020.
• Additional key drivers in the advertising industry are the India and Brazil and, while Germany will remain the fifth largest market by 2024, France is set to be overtaken by India and Brazil.

The report also notes that, while global television ad revenue is estimated to decline by -3.6 per cent in 2019, the median growth rate was +0.1 per cent and should be 1.8 per cent in 2020. This illustrates that there are many countries where TV advertising is still growing, especially as consumption using internet-connected devices continues to grow (accounting for nearly 15 per cent of TV-related activity and growing by about +30 per cent year-over-year).