The latest ad spend forecasts from Dentsu Aegis Network shows slower growth than originally predicted in Australia and key markets around the world.

Overall global ad growth is predicted to grow 3.6 per cent in 2018, down from the 4.3 per cent growth Dentsu predicted in June 2017.

Growth is tipped to slow in markets like Australia and China which Dentsu attributes to factors such as a naturally maturing markets, ad fraud and data accuracy issues on top of a general economic slowdown.

Dentsu Aegis had previously predicted Australia’s ad market to grow 4.8 per cent in 2018, but has now revised that forecast down to 2.9 per cent.

This trend is also apparent in markets like the UK, where ad spend is predicted to grow at 2.9 per cent in 2018, down from a previous forecast of 5.9 per cent. North America will grow 3.1 per cent, instead of a predicted 4 per cent.

“The latest ad spend forecasts show a market in transformation, but not recession,” said Jerry Buhlmann, CEO of Dentsu Aegis Network.

“The challenge for brands is to navigate an uneven economic outlook alongside a rapidly evolving tech and innovation landscape. In many markets, disruptive innovation – from mobile, voice activation and new ad tech players – is still providing new sources of growth and we forecast this trend will continue into 2018.”

Digital media channels will continue to power ad spend growth, growing globally by 12.6 per cent in 2018, versus 15 per cent in 2017, to reach US$220.3 billion, according to Dentsu Aegis Network’s latest Ad Spend Forecasts.

Other key forecasts for digital channels include:

  • Paid search accounts for the lion’s share (40 per cent) of digital ad spend, with voice-activated devices helping to power its growth.
  • Digital overtakes TV, by a margin now exceeding previous forecasts. Digital ad spend will account for 38.3 per cent share of total ad spend, TV 35.5 per cent.
  • Mobile will go from strength to strength, reaching US$121.1 billion having overtaken desktop as a share of total digital spend in 2017. Desktop will continue to lose global share (-1.5 per cent since 2016), versus mobile’s gains (8.2 per cent since 2016)
  • Video (24.5 per cent) and social (23.5 per cent) will also drive growth within digital ad spend, powered by smartphone take-up and mobile-video in particular.
  • Programmatic spend will rise by 23 per cent as established players and startups compete over ad tech.

Asia Pacific ad spend growth is forecast to accelerate to 4.2 per cent in 2018, up from 3.5 per cent in 2017. The region is forecast to be the leading contributor to global ad spend growth in 2018, contributing 39.7 per cent, US$8.1 billion of the total US$20.3 billion incremental global increase, led by markets China, Japan, India and the Philippines.

Source: Dentsu Aegis Network’s latest Ad Spend Forecasts January 2018
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