In its latest report on global advertising market trends, MAGNA forecasts media owners’ net advertising sales to grow by +3.7% to $505 billion in 2017.
Digital media has now surpassed linear television to become the No.1 category in advertising revenues.
Within digital, the majority of advertising sales (54%) is now generated by impressions and clicks on mobile devices.
Television ad sales will be down (-1%) for the first time since 2009.
- Globally, media owners advertising revenues are projected to grow by +3.7% in 2017, to $504 billion. This is in line with MAGNA’s previous forecast (December 5, 2016). This is a noticeable drop compared to 2016 which displayed a record +5.9% growth rate.
- Global advertising growth is expected to re-accelerate to +4.5% in 2018, with the return of even-year events (Football World Cup in Russia, Mid-Term U.S. elections, Winter Olympics in South Korea).
- 67 of the 70 markets analyzed by MAGNA will experience some level of growth this year. Within the top 20 markets, highest growth rates are expected in China and Spain (both +7%), India (+12%) and Russia (10%).
- The fastest-growing region this year will be Central & Eastern Europe (+7.2%), ahead of Latin America (+5.9%) and APAC (+5.6%). The slowdown vs 2016 is mostly concentrated in North America (+1.7% vs 7% last year) and Western Europe (2.8% vs 4% last year).
- After a positive performance in 2016 (+3.3%) linear television advertising sales will decrease this year by almost -1% due to the lack of sports events and the erosion of viewing and ratings, despite CPM inflation.
- Online advertising sales will grow by 14% this year while offline ad sales (television, print, radio, out-of-home) will decrease by -2% (last year was flat). Online advertising will pass the $200 billion mark ($204 billion) to become the #1 category globally, with 40% of total ad sales vs 36% for television.
- Within digital, the majority of advertising sales (54%) is now generated by impressions and clicks on mobile devices. Mobile advertising will be passing the $100 billion mark for the first time this year ($110bn).
- Video and social formats will continue to drive digital advertising growth (+30% or more) while paid search will grow double digit again (+13%) to remain the #1 format (almost half of digital ad sales).
According to Vincent Létang, EVP, Global Market Intelligence at MAGNA and author of the report: “The record level of growth in 2016 globally, outperforming economic growth, was caused by marketers willing to embrace the new opportunities offered by digital media (search, social, video, programmatic) on a larger scale, while anxious to preserve their share of voice on traditional linear television, despite rising CPMs costs. In 2017, both digital and offline growth will slow down. Online advertising sales will nevertheless continue to grow by double-digits in most markets (globally +13%), but television ad sales will decline (-1%) due to softer price increases, ratings erosion and the lack of global sports events.”
Central and Eastern Europe to Experience +7.2% Growth, Reaching +$16.7 Billion.
Central and Eastern European advertising sales will grow by +7.2% this year to $16.7 billion, ahead of prior expectations. Spend growth is going to slow slightly in 2018 to +5.3% (previously +5.6%).
While the past few years in the Central & Eastern European region have been characterized by political uncertainty and economic instability, things have normalized on a relative basis in 2016 and so far in 2017. Advertising revenues in Russia grew by +10.5% in 2016 and are expected to see similar growth in 2017. Ukraine recovered in 2016, returning to growth after a two years of decline, and will grow again in 2017.
Finally, the Turkish ad market continues to grow by nearly +8% this year, despite political unrest and publication closures.
Behind Ukraine and Russia’s recovery growth, the fastest growth comes from Romania, Turkey, and the Czech Republic, all of which are growing in the high single digits this year. The slowest growth in the region is expected in Croatia, where there is consumer deflation. Markets that have struggled of late are also expected to show some recovery growth in 2017.
READ THE FULL STORY: MAGNA Global Ad Forecast Spring Update_June 2017