Global Adspend to Accelerate in 2016

LONDON: Global advertising revenues will rise by 4.6 percent this year, ZenithOptimedia projects, reaching $579 billion, up from the 3.9-percent growth rate in 2015.

ZenithOptimedia’s new Advertising Expenditure Forecasts projects global ad revenues of $600 billion in 2017, reaching $603 billion by the end of next year.

The study notes that there are challenges ahead for the global economy, including the slowdown in China, the recessions in Brazil and Russia, the situation in Syria and uncertainty over the future of the European Union. Nonetheless, advertisers’ confidence is strong.

Special events are driving ad revenues this year. The U.S. presidential elections, the Summer Olympics and the UEFA football championship in Europe will add $6.1 billion to the global ad market this year, including $3.2 billion from the elections, $2 billion from the games in Rio and $900,000 from the European football tournament.

ZenithOptimedia also points to a recovery in those markets worst hit by the eurozone crisis. Ireland, Portugal and Spain, where adspend fell by 45 percent between 2007 and 2013, showed a gain of 7.3 percent last year. Adspend in these three markets is forecast to rise 6.7 percent a year to 2018. Gains are also being seen in other markets hit by the crisis, including Croatia, Denmark, Hungary and Romania. ZenithOptimedia gives Greece a 3.9 percent growth forecast.

The study also points to markets that are opening up to international advertising for the first time. These “30 rising media markets” generated $7.7 billion in adspend last year. Of the 30, more than half are in Africa (they include Kenya and Uganda), 7 are in Asia (among them Bangladesh, Cambodia and Mongolia), 6 in Latin America (Paraguay and Guatelama are on the list) and 1 is in the Middle East. All have rapidly growing economies and ad markets. ZenithOptimedia expects ad revenues from these 30 markets to grow at an average rate of 15 percent a year between 2015 and 2018, more than three times faster than global average, rising to $11.7 billion.

Internet advertising is expected to overtake television in 2017, a year ahead of ZenithOptimedia’s previous forecast. Internet advertising will rise by 15.7 percent this year, driven by social media (31.9 percent), online video (22.4 percent) and paid search (15.7 percent).