Digital ad spend might be growing by double digits, but GroupM has still written down its global ad expenditure forecast for 2016 from 4.5 per cent to 4 per cent after witnessing slowing growth in the emerging markets of China and Brazil.
In its latest biannual worldwide media and marketing forecasting report, This Year, Next Year, the agency put global ad expenditure forecast at US$529 billion, and also pitched its initial outlook for 2017 to $552 billion, or 4.3 per cent growth. Despite the lower projections, however, total marketing services expenditure, including advertising plus marketing services, is expected to hit $1 trillion for the first time next year.
In China, GroupM reported 2016 growth is now forecast at 6.6 per cent, a drop of 2.5 per cent on initial projections, triggered by a slowdown in fixed investment and profits. This puts China’s initial advertising growth estimate at 7 per cent. Brazil has also witnessed growth slow and been hit by a continuing economic recession and political issues, which saw 7 per cent growth forecasts in 2016 slashed to 1 per cent.
As a result of these figures, GroupM expected the US to be the lead contributor of global ad growth this year for the first time since China took over the top spot in 2007. The agency revised its advertising growth estimates for the states from 2.7 per cent to 3.1 per cent, mainly due to a healthier TV marketplace.
India remains the fastest growth larger economy, with a forecasted annual rate of 14 to 15 per cent both this year and in 2017. GroupM suggested the country will be the 10th advertising market in terms of size by 2018 with more than $10bn in annual investment.