Mobile to Power Increase in Global Ad Spend

Mobile advertising is forecast to grow  faster than any other channel in 2016
Mobile advertising is forecast to grow faster than any other channel in 2016

Global ad spend across all media will increase by $23.8bn (£15.9bn) to reach $540bn, representing a 4.6 per cent year-on-year increase, according to Carat’s 2016 worldwide advertising expenditure forecast. In the UK, the total advertising market is forecast to grow by 6.4 per cent, with only the print sector expected to slow down.

The growth will be powered by digital, with Carat forecasting that digital media spend will account for 48.2 per cent of the total UK market this year, increasing to a majority share of 51.1 per cent in 2016. Within the Digital sector, display spend is expected to increase by 12.4 per cent, with Video rising by 15 per cent and mobile by 55.3 per cent.

Based on data received from 59 markets across the Americas, Asia Pacific and EMEA, Carat’s latest global advertising expenditure forecasts show that dgital media, with a predicted $17.1bn (15.7 per cent) increase in spend in 2015, is outpacing previous Carat predictions from September 2014. Powered by a dramatic rise in mobile ad spending globally of 50 per cent and online video of 21.1 per cent predicted in 2015, Carat forecasts that digital will, for the first time, account for more than a quarter of all advertising spend in 2016 with a market share of 25.9 per cent.

All regions reported positive growth in 2014, from Western Europe at 2.3 per cent, 4.5 per cent in N. America, 5.3 per cent for Asia Pacific and Latin America up 11.4 per cent. Regional confidence is predicted to continue in 2015 with all key markets forecasting positive growth next year except Russia, due to a struggling advertising market and predicted recession.

Western Europe is strengthened by a second consecutive year of positive growth driven by strong numbers in the UK and Spain; as well Greece, Ireland, and Portugal returning to positive growth after six consecutive years of ad spend declines. N. America continues to grow at a solid rate of 4.5 per cent in 2015 and 4.6 per cent in 2016, with programmatic spending in the US predicted to grow by 137 per cent to reach $10bn in 2016.

Whilst Digital is the star performer in terms of growth (and mobile standing out within digital), TV will continue to command the majority of market share for the foreseeable future, reaching 42.7 per cent in 2014, and predicted to grow by more than 3 per cent year-on-year in 2015 and 2016. The steady decline in print is expected to continue, with out-of-home is now positioned as the second fastest growth media, behind digital, with a global market share of spend of 7.1 per cent. For the first time, out-of-home is predicted to outpace magazines; global share of ad spend, with magazines forecast to achieve 6.9 per cent market share in 2015, and with continuing declines for this media, it is predicted to fall behind radio for the first time in 2016.

“Carat’s latest advertising forecast gives us increased optimism for the outlook for global advertising spending,” said Jerry Buhlmann, CEO of Dentsu Aegis Network. “With harder times behind us, negative growth markets are pleasingly now a minority, and collectively we can look ahead to 2016 with positive growth predicted for all key markets.

“The strength of digital continues to dominate discussions and the new distribution of spending. With a quarter of the global population now owning and relying on their smartphones daily, they are our second brain in our hands. Mobile dominates the way consumers access information, view content, browse products and purchase goods.”