UK ad-spend growth highest in Western Europe at +6.1% in Dentsu Aegis Network forecast
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· UK has the world’s highest share of digital spend (64%) followed by China (62%).
· Digital continues to drive the UK market with +10.9% growth forecast in 2019.
· Food industry has the largest ad spend growth while entertainment & leisure lead national spend.
10 January 2019. Dentsu Aegis Network’s latest advertising spend forecast, based on data from 59 markets, predicts global growth will reach +3.8% in 2019, following +4.1% in 2018, taking total investment to US$625 billion. Geographically, Asia Pacific and North America will be the major growth regions next year, contributing 42% and 30% of the global increase respectively. Western Europe accounts for 15% with Latin America at 10% and Central and Eastern Europe 4%.
The UK marketin 2019isresilient and is forecast to grow by 6.1% this year, a slight decrease on 2018 but still a relatively buoyant outlook. This amounts to £22.2 billion (around US$28.3 billion) and also reflects an upward revision from the 4.7% growth predicted in our June 2018 report.
This is driven by double-digit growth in Digital (+10.9%) and the world’s highest share of digital spend at 64%. Concerns around the impact of Brexit and the general data protection regulation (GDPR) have yet to manifest in falling advertiser confidence. In fact the UK is forecast to see the highest growth in Western Europe in 2019 at +6.1% and on to +7.1% in 2020.
In 2018, UK advertising spend grew by 6.5%, an upward revision. The UK had a stronger than expected start in Q1 and Q2 with increased investment around the World Cup. The fastest-growing industries by ad spend were food (24.2%) and household equipment and DIY (13.7%) followed closely by finance.
The fastest-growth industry was food (24.2%) while travel & transport saw a decline, with -4.2% y-o-y growth. Entertainment & Leisure (2.44 bn GBP) leads the industry ranking.
Commenting on the latest forecasts, Tim Andree, CEO & Chairman of Dentsu Aegis Network, said:
“As the world transitions to a digital economy, advertising is at the leading edge of change. Digital connectedness - driven not only by advances in technology, but the speed of consumer adoption - has fundamentally changed the shape of our business and will continue to do so. Even where digital penetration is highest - such as the UK and China – the trend shows little sign of slowing down.
“We’re positioned to harness this opportunity for our clients – helping them adapt to a new, digital context, building the long-term health of their brands and driving business performance.”
Media trends in the UK
TV: Returning to growth in 2020
In 2019 TV is forecast to slow to -0.4% as some advertisers show reluctance to invest amidst wider economic uncertainty. Our forecasts show a return to growth in 2020 at +2.0%. Traditional broadcasters have found huge business value in partnering with the big internet players, by doing co-productions, distributing back content and offering live-streaming.
Digital: Largest share of spend
In the UK the total share of advertising spend on Digital in 2019 is forecast to hit 64%, the largest in the world. Digital continues to be the main driver of advertising spend growth around the world and particularly in the UK. Within Digital growth is again driven by Programmatic and Mobile at 84.5% and 73% respectively.
Print media: Downward trend mirrors the global average
Traditional print continues to decline (Newspapers -7.0% and Magazines -11.0% in 2019) as the focus moves to digital. In the UK the decline in Magazine spend is faster than the global average but is forecast to slow to -8.0% in 2020.
Radio: Importance of audio and voice
Radio is forecast to grow +2.0% in 2019 – higher than the global average. Fast-growing technologies such as voice assistants and smart speakers are expected to push the usage of audio.
| % Share of Advertising Expenditure by Medium | |||||||
| Television | Newspaper | Magazine | Radio | Cinema | Outdoor | Digital | |
| 2015 | 24.7 | 11.0 | 3.8 | 3.4 | 1.4 | 6.1 | 49.6 |
| 2016 | 24.2 | 7.8 | 3.0 | 3.3 | 1.5 | 6.2 | 54.0 |
| 2017a | 22.3 | 6.4 | 2.4 | 3.4 | 1.5 | 5.8 | 58.3 |
| 2018f | 20.9 | 5.5 | 2.0 | 3.3 | 1.4 | 5.6 | 61.3 |
| 2019f | 19.7 | 4.8 | 1.7 | 3.2 | 1.3 | 5.3 | 64.0 |
| 2020f | 18.7 | 4.2 | 1.4 | 3.0 | 1.3 | 5.0 | 66.3 |
Source: Dentsu Aegis Network
Global trends
• Digital ad spend to grow by +12.0% in 2019 to reach US$254 billion and 41% of global share. Digital will be the leading channel in 26 of 59 markets analysed, with the US, Japan, Czech Republic, Malaysia and Singapore joining this list for the first time.
• Strong growth on mobile continues (+19.2%) with video particularly strong (+20.0%), driven by viewing on mobile devices and the growing popularity of catch up. Social media growth forecast to remain strong in 2019 (+18.4%), despite brand safety and privacy concerns.
• Programmatic forecast to grow +19.2% in 2019 as the model starts to be adopted across other media e.g. TV, DOOH.
• TV ad-spend is forecast to grow +0.5% in the face of competition from video-on-demand services such as Netflix. However, TV continues to innovate – particularly in the US – through ad-formats, reduced ad loads and attribution solutions.
• Radio is forecast to grow +1.1% in 2019 to reach US$37 billion - 6.0% of total spend. Fast-growing technologies such as voice assistants and smart speakers are expected to push the usage of audio.
• Traditional print continues to decline (Newspapers -7.2% and Magazines -7.0% in 2019) as the focus moves to digital.
• Out of Home continues to grow (+4.0% in 2019) to reach 6.3% share, with growth driven by DOOH.
Market trends
Asia Pacific and North America forecast to contribute 42% and 30% of the global increase respectively. Western Europe will grow by 15% with Latin America at 10% and Central and Eastern Europe 4%.
· China: growth forecast at +7.0% in 2019 to reach RMB 682.1billion. Digital dominates (63% of share) and growth will continue at +12.5%, driven by rising consumer affluence. OOH is forecast to grow +10.0% whilst linear TV is forecast to decline by -4.0% as advertisers shift budgets to online TV.
· United States: growth forecast at +3.0% in 2019 to reach US$223.6 billion, with digital forecast to overtake TV ad-spend for the first time. Linear TV under pressure with no major events, such as elections or Olympics, affecting spend and audience ratings putting pressure on price. Digital ad spend continues to grow (+12.3%) powered by mobile as time spent on devices continues to rise.
· UK: resilient growth forecast at +6.1% in 2019 to reach £22.2 billion. Digital continues to drive the UK market with +10.9% growth forecast in 2019 and the world’s highest share of digital spend (64%). Concerns around the impact of Brexit and the general data protection regulation (GDPR) have yet to manifest in falling advertiser confidence.
Figure 1: Growth in global advertising spend 2018-20f
| YEAR ON YEAR % GROWTH AT CURRENT PRICES | |||
| 2018a | 2019f | 2020f | |
| GLOBAL | 4.1 (3.9) | 3.8 (3.8) | 4.3 |
| NORTH AMERICA | 3.4 (3.4) | 3.1 (3.2) | 3.6 |
| USA | 3.4 (3.4) | 3.0 (3.1) | 3.6 |
| CANADA | 3.7 (2.3) | 5.2 (5.1) | 5.1 |
| W. EUROPE | 3.4 (2.9) | 3.2 (2.9) | 3.3 |
| UK | 6.5 (4.2) | 6.1 (4.7) | 7.1 |
| GERMANY | 1.0 (2.6) | 0.5 (2.9) | 0.5 |
| FRANCE | 3.6 (2.5) | 3.1 (2.8) | 2.5 |
| ITALY | 1.6 (1.4) | 0.8 (1.1) | 1.6 |
| SPAIN | 1.8 (1.5) | 1.2 (1.2) | 0.8 |
| C&EE | 8.6 (7.8) | 5.8 (6.6) | 6.2 |
| RUSSIA | 12.0 (11.7) | 6.9 (8.5) | 6.7 |
| ASIA PACIFIC | 4.6 (4.5) | 4.5 (4.4) | 4.9 |
| AUSTRALIA | 3.7 (2.8) | 2.8 (2.4) | 2.6 |
| CHINA | 7.8 (6.5) | 7.0 (6.0) | 6.4 |
| INDIA | 9.6 (10.5) | 10.6 (11.1) | 11.6 |
| JAPAN | 0.2 (1.5) | 0.6 (1.2) | 2.4 |
| LATIN AMERICA | 9.9 (6.9) | 7.9 (7.3) | 8.6 |
| BRAZIL | 7.1 (2.3) | 3.6 (2.6) | 6.2 |
| Figures in brackets show our previous forecasts from Jun 2018 |
Figure 2: Growth in global advertising spend by media, 2018-20 (% y-o-y)
| GLOBAL YEAR ON YEAR % GROWTH AT CURRENT PRICES | |||
| 2018a | 2019f | 2020f | |
| TELEVISION | 0.8 (1.2) | 0.5 (1.1) | 1.6 |
| NEWSPAPERS | -9.1 (-7.5) | -7.2 (-7.4) | -6.8 |
| MAGAZINES | -6.8 (-6.5) | -7.0 (-6.4) | -5.4 |
| RADIO | 2.7 (2.0) | 1.1 (1.2) | 1.2 |
| CINEMA | 3.2 (5.9) | 4.5 (5.2) | 4.5 |
| OOH | 4.7 (2.2) | 4.0 (2.1) | 3.9 |
| DIGITAL | 13.8 (12.6) | 12.0 (11.3) | 10.8 |
| Figures in brackets show our previous forecasts from Jun 2018 |
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