Big brand budgets and quadrennial events such as the Olympics, European Football Championship and US Presidential Election drove 2016’s global advertising revenue growth to US$532 billion (NZ$746), according to the 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 London-based Eleni Marouli, principal analyst, IHS Technology, and report author.
Marouli says global advertising revenue grew 7.1% in 2016 to US $532 billion (NZ$746). “Strong growth in global real private consumption also buoyed advertising revenue as brands tried to take advantage of heightened consumer spending,” the report said.
Advertising revenue accounted for 0.69% of global GDP in 2016, up from 0.66% in 2015.
Top 10 markets
The top 10 markets make 75% of the global revenue figure. “The top 10 markets still account for the lion’s share of global advertising revenue,” she said. “However, their collective power has dropped due slowdowns in the Chinese and Brazilian economies, which were the rising stars in the top 10 in 2015.”
The top 10 accounted for 76% of global ad revenue in 2015; it dropped to 75% 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%r cent,” 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 No 1, but online will overtake by 2020
TV was the number one medium globally for advertising revenue, accounting for US$192 billion, or 36%, 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 per cent of total advertising revenue and will only keep getting stronger” Marouli said.
In 2016, online advertising accountedt for almost US$160 billion (30%) of global revenue. Print advertising is next with $101 billion, followed by radio with US$47 billion in revenue.
Israel, Switzerland and the US top the adspend 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 Asia-Pacific 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.”
- More at ihsmarkit.com
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