U.K. Ad Spend Forecast Downgraded for 2016

LONDON: In Carat’s latest ad spend report, growth forecasts for the U.K. have been revised downward after the EU referendum, though a healthy 5.4 percent gain is expected in 2016, followed by 4.6 percent in 2017.

The U.K. is still the number-one ranking advertising market in Western Europe and the fourth globally. Growth in the U.K. is primarily driven by the continued rise of digital, accounting for a 53.6 percent share of spend in 2016 and set to maintain pace in 2017, with an 11.5 percent increase.

Based on data received from 59 markets across the Americas, Asia Pacific and EMEA, Carat’s latest global forecasts show that advertising spend will reach $548.2 billion in 2016, accounting for 4.4 percent year-on-year growth. The healthy outlook is fueled by a buoyant 2016, marked by high-interest media events including the UEFA EURO championship, the Rio 2016 Olympics and Paralympics, as well as the upcoming U.S. presidential elections.

Carat reports particularly robust growth in North America (5 percent) and strong recovery in Russia (6.2 percent), countering lower expectations in some markets. The U.S. continues to show positive market confidence, with forecasts revised up to 5 percent as the U.S. presidential elections alone are expected to generate $7.5 billion of incremental spend.

Advertising forecasts are also set to remain strong in Latin America and the Asia Pacific, with 10 percent and 3.9 percent growth, respectively, in 2016.

The positive momentum of the global advertising spend is expected to continue into 2017, reaching $570.4 billion, a 4 percent year-on-year growth led by the ongoing upsurge of digital media. Digital continues to grow at double-digit prediction levels of 15.6 percent in 2016, accelerating further at 13.6 percent in 2017.

TV continues to hold the highest share of total media spend, with 41.1 percent in 2016—boosted by high-interest media events. However, it is expected to grow at a more moderate rate of 2.3 percent in 2017, with a lower predicted share of spend at 40.3 percent.

“Carat’s latest forecasts show continued confidence and positive momentum for global advertising spending,” said Jerry Buhlmann, CEO of Dentsu Aegis Network. “Expanding over three times faster than the global rate, digital reaffirms itself as the unrivaled driver of growth. As the digital economy brings complexity, speed of change and disruption, it is only through digital that brands can build engagement and remain relevant to their audiences on a fully addressable and real-time basis. In a world where connectivity and convergence are now the norm, mobile, social and online video lead the rapid growth of digital investments. With more flexible, targeted and data-led media solutions, mobile, social and video are driving the demand for richer and more powerful consumer engagements, in the right place, at the right time.”