Key trends: a global overview

Compared to the release in December 2016, Zenith only revised 2019 ad spend down by 0.1% to 4.2%.
Fast-track Asia and Eastern & Central Europe are the best performing regions, while MENA lags in the bottom position.
The USA with its vast scale and China with its rapid growth, remain by far the largest contributors to global ad spend growth. Together, they are predicted to contribute 52% to the $74bn of additional expenditure in 2016-2019.

by regional bloc

Europe

Zenith expects Eastern Europe and & Central Asia to be the fastest growing regional bloc to 2019, with a buoyant 8.9% growth in ad spend. The region seems to be steadily overcoming some serious set-backs over the last few years including the conflict in the Ukraine, sanctions against Russia and a sharp drop in oil prices.
Despite being heavily affected by the 2008-2009 financial crisis, Western & Central Europe is expected to continue with its solid recovery observed since 2014, at 3.7% growth. The UK is forecast to grow at only 2.7% in 2017 compared to 9.2% back in 2015. Though, it is unclear whether the slowdown was due to the political uncertainty or because of inflated growth in previous years. However, an expected strong ad spend growth in Portugal, Spain and Sweden compensate to maintain a healthy forecast in Europe.

Asia

When looking at Asia, Zenith assesses Japan independently. It is again forecast to have a persistently low average ad spend growth of 1.9% between 2016 and 2019.
Advanced Asia, with an average growth of 5.3% in 2015, could have been experiencing inflated media spend due to Australia’s particularly strong growth and Singapore’s 50th  birthday. Now, combined with a fall of Chinese shoppers coming to Hong Kong, the region is predicted to grow at only 2.8% to 2019.
Fast-track Asia barely felt the 2009 downturn. It grew rapidly through an increased adaptation of Western technology and practices as well as receiving investment from abroad. However, China - the main engine accounting for ¾ of the ad market, is slowing, inevitably affecting the rest of the region. Zenith predicts an average 7.9% growth 2016-2019 - a contrast to the 10.8% growth in 2011-2016.

Americas

2016 saw North American ad spend grow by 4.3% in 2016 compared to Western & Central Europe’s 3.5%. The growth was due to increased spending prompted by the elections and the Olympics. However, without such cyclical events, it is predicted to have a marginally lower growth to Europe’s, with 3.4% per year to 2019.
Key markets in Latin America, especially troubled Venezuela, were all experiencing recession in 2016. With economies rebounding in the coming years, and Venezuela carrying less ad spend weight, Zenith predicts a 2% annual ad spend growth to 2019.

MENA

Finally, the falling oil prices in 2014 had detrimental effects on the ad market in MENA. Political turmoil and expectations of lower demand have affected advertisers’ confidence. 2016 saw a decline of 10.1% in ad spend. This year the fall is forecast at -9.0%, and will be followed by a milder yet still negative growth in 2018 (-3.2%) and 2019 (-1.1%).

Key trends: a media overview

With continued digital developments, Out-of-Home remains the 3rd largest contributor to global ad spend growth.
Internet and its sub-medium, mobile internet advertising remain at the top of the agenda. Internet is forecast to overtake TV this year with a share of global ad spend of 36.9%. Mobile is by far the main driver of global ad spend growth.
Zenith highlights how although TV is losing ad spend share, its strength as an audio-visual advertising medium is complemented by online video advertising. The combination of the two gives audio-visual a dominant share of display advertising.

By medium

% SHARE OF GLOBAL AD SPEND BY MEDIUM 2016-2019
Source: ZenithOptimedia Advertising expenditure forecasts, March 2017


According to Zenith, Out-of-Home (OOH) advertising remains as the 3rd largest contributor to global ad spend. Developments in measurement and rollout of new digital formats drive the solid growth of the medium. Powerful broadcast and brand building capabilities of OOH combined with innovative message delivery such as dynamic content, are contributing to the exciting evolution in the industry.
 

CONTRIBUTION TO GLOBAL GROWTH IN AD SPEND BY MEDIUM 2016-2019 (BILLION USD)
Source: ZenithOptimedia Expenditure Forecasts, March 2017


Zenith maintains its prediction for internet advertising: 2017 will be the year it finally overtakes TV with a forecast of 36.9% of total ad expenditure in 2017, and 41.7% by the end of 2019. When looking at audio-visual as a whole (TV plus online video), Zenith underlines its dominance in display advertising with a forecast 49% share in 2019. The improvements in quality and availability helped drive online video advertising to its predicted average growth of 17% per year between 2016 and 2019.
While mobile continues its dramatic ascent, overtaking desktop by leaps and bounds, it is predicted to be somewhat slower in 2016-2019 with an average growth of 26%. Nonetheless, by 2019 it is expected to account for an impressive 27% of all ad expenditure, and 64.7% of total internet ad spend.


Notes:
Source: ZenithOptimedia Advertising Expenditure Forecasts March 2017
Currency in USD
*Average annual ad spend growth 2016-2019
*Advanced Asia: Australia, New Zealand, Hong Kong, Singapore, South Korea
*Fast-track Asia: China, India, Indonesia, Malaysia, Pakistan, Philippines, Taiwan, Thailand, Vietnam
Mature Markets: North America, Western Europe, Japan