Zenith has revised its global advertising expenditure growth forecast to 4 percent at $558 billion by the end of 2017 from the previously predicted 4.2 percent growth.
“Our forecast for 2017 is 0.2 percentage points below the forecast we made in June, with marginal downgrades for Western Europe, Asia Pacific and Latin America, compensated for by upgrades in North America and Central and Eastern Europe,” the firm said.
Advertising expenditure grew ahead of the wider economy for the third consecutive year in 2016, but Zenith expects it to fall behind over the next three years.
Zenith expects North American adspend to grow 3.6 percent this year, and forecasts an average of 3.4 percent growth a year to 2019. In Latin America, 2.5 percent growth in adspend is expected this year, with 2.7 percent average annual growth to 2019. The forecast in Western and Central European is for 2 percent growth, down from 3.9 percent growth in 2016, and an annual average of 2.6 percent growth to 2019. Adspend in the Middle East and North Africa is forecast to drop 18.6 percent, following a 10 percent decline in 2016. Zenith predicts no recovery during its forecast period, expecting adspend to shrink 6.3 percent in 2018 and 0.7 percent in 2019.
The forecasts for Eastern Europe and Central Asia are for an average annual growth to 2019 from 9.2 percent to 9.4 percent. Fast-track Asia’s expenditure is predicted to grow 7.6 percent in 2017 and at an average rate of 7.3 percent a year between 2016 and 2019, down from 10.8 percent a year between 2011 and 2016. Japan behaves differently enough from other markets in Asia that it is being treated separately. Despite recent measures of economic stimulus, Japan remains stuck in its rut of persistent low growth. Zenith forecasts average adspend growth of 1.9 percent a year between 2016 and 2019, after a relatively strong year of 3 percent growth in 2016. Apart from Japan, there are five countries in Asia with developed economies and advanced ad markets that Zenith has placed in a group called Advanced Asia: Australia, New Zealand, Hong Kong, Singapore and South Korea. Advanced Asia is expected to maintain a growth rate averaging 2.8 percent a year through to 2019.
The U.S. will be the leading contributor of new ad dollars to the global market over the next three years, making up in scale what it lacks in speed. China will come second, combining large scale and rapid growth—though its growth is slowing as its scale increases. Between 2016 and 2019, Zenith forecasts global advertising expenditure to increase by $69 billion in total.
Evaluating adspend by medium, internet is forecast to overtake television to become the largest advertising medium this year. Zenith says that television’s share peaked at 39.3 percent in 2012, fell to 35.5 percent in 2016, and by 2019 it is expected to fall back to 32.4 percent, its lowest share since 1989.