(marketingmagazine.com.my) – Big brand budgets and quadrennial events such as the Olympics, European Football Championship and US Presidential Election powered 2016’s global advertising revenue growth to $532 billion according to the annual Global Advertising Trends report from IHS Technology’s Advertising Intelligence Service.
“The advertising industry is about to turn the corner thanks to the global economy getting back on track,” said Eleni Marouli, principal analyst, IHS Technology, and report author.
Advertising revenue grew 7.1 percent in 2016 to $532 billion. Strong growth in global real private consumption also buoyed advertising revenue as brands tried to take advantage of heightened consumer spending. Advertising revenue accounted for 0.69 percent of global GDP in 2016, up from 0.66 percent in 2015, the report said.
Top 10 markets
The top 10 markets make 75 percent of the global revenue figure. “The top 10 markets still account for the lion’s share of global advertising revenue,” Marouli said. “However, their collective power has dropped due slowdowns in the Chinese and Brazilian economies, which were the rising stars in 2015.”
The top 10 accounted for 76 percent of global ad revenue in 2015; it dropped to 75 percent in 2016.
Fastest growing region: Africa
Four out of the five fastest growing countries in 2016 were in Africa. “Ghana and Kenya have been high on the list of many media companies’ expansion plans, and we are seeing growth above 20 percent,” Marouli said. “These markets are still growing from a low base, but the sheer size of their populations means they are becoming interesting targets for big brands.”
TV remains number one, but online will overtake by 2020
TV was the number one medium globally for advertising revenue, accounting for $192 billion, or 36 percent, of global revenue. “Despite the incredible growth of online giants like Facebook, Google and Snapchat, the TV market continues to benefit from big brand budgets,” Marouli said.
“Quadrennial events such as the Olympics, the European Football Championship and the US elections helped keep TV on top.”
However, revenue from online advertising will overtake TV within the next five years. “In some countries such as the UK, online already accounts for almost 50 percent of total advertising revenue and will only keep getting stronger” Marouli added.
In 2016, online advertising will account for almost $160 billion, or 30 percent of global revenue. Print advertising sits in third with $101 billion, followed by radio with 8.4 percent of the market and $47 billion in revenue.
In the US, TV advertising revenue will make up roughly 38 percent of the country’s total; online is just behind with 36 percent.
In China, online advertising revenue will be 17 percent greater than TV advertising revenue, a difference of $15 billion.
Israel, Switzerland and the US top the ad spend per person
The most mature markets are mostly high GDP per capita markets, according to the IHS Technology report. Israel topped the list at $719, followed by Switzerland and the US. China generated only $65 per person in advertising, despite being the second largest advertising market. Zimbabwe was the last on the list with $0.002 ad revenue per person per year.
Expect double-digit growth in 2017
“We expect global advertising revenue will grow to $590 billion in 2017,” Marouli said. “The strongest growth will come from the Middle East and Africa, followed by Asia Pacific, where India and Indonesia will steal the show.”
Developed markets are likely to slow down in an “event-light”, following the high spending for the Olympics and the US elections, the IHS Technology report said. Online will continue to be the fastest growing medium at 14 percent, however, a slowdown in the revenue growth of Google and Facebook, is likely as the two are not attracting TV budgets to their online video offerings as fast as they had hoped.
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