Dentsu Aegis Network 2019 ad-spend forecasts slip from $625 billion to $609 billion

• Global ad-spend forecasts for 2019 have slipped to 3.6% globally from January this year due to economic uncertainty and slowing growth in China, Italy and Russia.
• Ad-spend growth is predicted to re-accelerate to 4.1% in 2020 almost returning to 2018 growth of 4.3%.
• Digital continues to power ad spend growth and is forecast to grow 11.5% in 2019, increasing to a nearly 45% share in 2020.
• Rapid mobile growth to continue (+21.4%) with nearly a third of global ad-spend delivered through mobile platforms by the end of 2020.
• The UK market is resilient despite Brexit uncertainty with forecasts upgraded from January 2019.

11 June 2019. Dentsu Aegis Network’s latest advertising spend forecast, based on data from 59 markets, predicts global growth will reach +3.6% in 2019, following growth of 4.3% in 2018, taking total investment to US$609.9 billion.

Forecasts have slipped from January following a challenging economic environment at the start of the year. Slowing growth in China as well as trade tensions between China and the US have also dampened growth.

The global forecast reflects softening growth across 9 of the top 13 advertising markets worldwide, with India and Brazil bucking the trend with accelerating growth in 2019. Some markets saw downward revisions from January 2019 forecasts including Italy and Russia with both markets seeing GDP slow alongside ad-spend.

Peter Huijboom, Global CEO, Media & Performance and Global Clients said:

“Our ad-spend forecasts paint a picture of an innovative industry, driving growth through transformation; in digital, in mobile and in traditional formats like TV. Digital remains the main force behind growth in a tougher economic environment – in our industry and beyond – as the development and adoption of new technologies continues apace. 2019 is set to be the year of 5G (alongside increasing and improving 4G coverage), smart TVs, developments in Paid Search and the continued march of Mobile Video.  

As a business built for the digital economy we’re at the forefront of this change, innovating alongside our clients to build long-term sustainable growth for their brands. We’re looking forward to a year of events including the European Football Championships, the Tokyo 2020 Olympics & Paralympic Games and US Presidential elections all boosting ad spend along with the digital developments driving growth.”  

Market trends

Asia Pacific and North America are forecast to grow 4.0% and 3.2% respectively. Western Europe will grow 2.8% with faster growth in Central & Eastern Europe at 4.9%. There is strong growth in Latin America at 9.1%

• India: forecast double-digit 2019 growth of 11.4% (up from the 10.6% forecast in January and 10.8% growth in 2018) with the Cricket World Cup putting growth on the front foot. Lok Sabha Elections are also set to increase spend in 2019.
  
• UK: Despite the continued uncertainty around Brexit, the UK market is resilient and has been upgraded from our previous forecasts to grow 6.3% in 2019. The UK is also on track for a tenth consecutive year of double-digit growth in digital advertising spend. The digital maturity of the UK market is one of the reasons it has proved more resilient to geopolitical uncertainty and possible growth-slowing impact of Brexit.
  
• France: growth forecast at 3.6% in 2019, a drop from 5.3% in 2018. The end of 2018 and early 2019 were marked by social and economic crisis in France with the ‘gilets jaunes’ movement. However, the situation is set to improve into Q3 with the French Government offering tax cuts for lower income households, more help for retirees with small pensions and other measures to respond to the protests. In June and early July, the FIFA Women’s World Cup is taking place in France, boosting TV ad-spend.
  
• Brazil: for June Brazil sees a significant revision upwards to 8.8% growth in 2019 driven by the mobile, which will make Brazil the largest digital market in Latin America. Economic and social uncertainty remain due to the political issues of the new government.

Media trends

• Digital continues to power ad spend growth and is forecast to grow 11.5% in 2019 to reach US$249.7 billion and 41.8% of global share. Growth is steady into 2020 putting digital’s share of ad spend at nearly 45% by the end of the year.
  
• Mobile is the fastest growing platform within digital and is forecast to grow 21.4% in 2019. Powering this growth is the increasing consumption of video on mobile – from Instagram Stories, TikTok and Snapchat to YouTube and VOD – with online video in general set to grow 20.5% in 2019.
  
• TV ad-spend is forecast to shrink slightly in 2019 (-0.1%) with a return to modest growth in 2020 of 0.6%.  Into 2020 growth will be driven by more dynamic TV opportunities and innovation as the penetration of smart TVs continues.
  
• The decline of traditional print has accelerated from our January 2019 forecasts (Newspapers -7.7% and Magazines -7.4%) as digital continues to dominate.
  
• Out of Home sees continued growth and an upwards revision from January to 4.3% in 2019 to reach 6.3% share. Growth is driven by innovations in DOOH.
  

Figure 1: Growth in global advertising spend 2018-20f

Figure 2: Share of global ad spend by media, 2018-20 (% y-o-y)