Zenith is now forecasting that global ad expenditure will grow 4.1 percent in 2018, reaching $578 billion by the end of the year, which is slightly below its previous prediction, as the markets in North America, Western Europe and the Asia Pacific have been downgraded.
The firm expects North American adspend to grow 3.4 percent in 2018 and forecasts an average of 3.2 percent growth a year to 2020. Latin America, however, is set to see healthy gains. Zenith is forecasting 2.8 percent growth in Latin American adspend this year, 3.4 percent next year and 4.4 percent average annual growth to 2020.
Zenith forecasts 1.7 percent growth in Western and Central European adspend this year, down from 3.9 percent growth in 2016. But the firm believes this will be a low point and expects an annual average of 3 percent growth to 2020. In the Middle East and North Africa (MENA), an 18.6 percent drop in adspend is forecast for this year, following a 10 percent decline in 2016. The region’s decline should be moderate in 2018 and 2019, and Zenith forecasts very modest 0.4 percent growth in 2020.
Ad markets in Eastern European and Central Asia have continued to recover, consistently outperforming expectations. Zenith now expects adspend will be up 11.1 percent in 2017, after which growth will settle down to a more normal 8.9 percent a year to 2020—ensuring that Eastern Europe and Central Asia remains the fastest-growing regional bloc over this period. Fast-track Asia—characterized by economies that are growing extremely rapidly as they adopt Western technology and practices and innovate new ones—is forecast to see ad expenditure grow 7.6 percent in 2017, and at an average rate of 6.4 percent a year between 2017 and 2020. This is less rapid than the growth in Eastern Europe and Central Asia, but Fast-track Asia is ten times larger, so contributes a lot more to global adspend growth. For Japan, average adspend growth of 2.1 percent a year is expected between 2017 and 2020, slightly behind the average annual growth rate of 2.4 percent between 2012 and 2017. Advanced Asia—Australia, New Zealand, Hong Kong, Singapore and South Korea—is forecast to see 3.1 percent average annual growth to 2017, fractionally above the 2.9 percent average growth rate since 2012.
Between 2017 and 2020, Zenith forecasts global advertising expenditure to increase by $72 billion in total. The U.S. will contribute 27 percent of this extra ad expenditure and China will contribute 20 percent, followed by Indonesia, India, the U.K. and Japan, which will contribute 4 percent each.
This year internet advertising has overtaken advertising in traditional television to become the world’s biggest advertising medium, accounting for 37.3 percent of total ad expenditure. As internet advertising matures, its growth is slowing down, but it remains the fastest growing medium by some distance. Zenith estimates that internet adspend grew 13 percent year on year in 2017 and forecasts an average growth rate of 10 percent a year between 2017 and 2020. By 2020 we expect internet advertising to account for 44.3 percent of global adspend. As for television, Zenith believes that TV’s share peaked at 39.3 percent in 2012. It fell to 34.3 percent in 2017, and by 2020 the firm expects it to fall back to 31.4 percent, its lowest share since 1981.