Global ad spend will hit $589.5bn (£428bn) in 2018, according to Dentsu Aegis Network’s latest Ad Spend Forecasts. Based on data received from 59 markets, the figures put global growth at 3.6 per cent in 2018, up from 3.1 per cent in 2017. The company said that events will play an important role in 2018, with the Winter Olympics & Paralympics, the FIFA World Cup in Russia and the US Congressional elections all expected to stimulate ad spend growth.
At a country level, the picture is mixed. For example, while ad spend in the US, Germany and India will grow faster in 2018 versus 2017, there are signs of a slowdown in the UK, Russia and China (see table).
Within this context, 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 $220.3bn. Mobile will go from strength to strength, reaching $121.1bn, having overtaken desktop as a share of total digital spend in 2017. Desktop will continue to lose global share (down 1.5 per cent since 2016), versus mobile’s gains (up 8.2 per cent since 2016).
Digital will also overtakes TV in 2018, by a margin now exceeding previous forecasts. Digital ad spend will account for a 38.3 per cent share of total ad spend, compared to 35.5 per cent for TV. Paid search accounts for the lion’s share (40 per cent) of digital ad spend, with voice-activated devices helping to power its growth. Amazon's Alexa app was the top app for Android and iPhone on Christmas Day 2017, with the company claiming its devices enjoyed the best holiday season yet. 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.
“The latest ad spend forecasts show a market in transformation, but not recession,” said Dentsu Aegis Network CEO, Jerry Buhlmann. “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.
“Succeeding in this environment requires global consistency through appropriate platforms and systems, [and] also the flexibility and agility to work with a wider ecosystem of tech-enabled solutions. It demands a relentless focus on understanding the consumer, using data to reach real people, driving relevance, addressability and business growth.”
You can see a full breakdown of forecast ad spend growth rates by region and country here.