China, new economies driving ad market growth: GroupM

Advertising spend is predicted to hit US$547 billion in 2017, representing 4.4 percent growth, of which half will come from the US and China, according to GroupM’s latest forecast.

The network’s ‘This Year, Next Year’ media and marketing report says the knock-on effects of paradigm-shifting events such as Donald Trump’s presidential victory and Brexit have led to a “new normal, more modest level of growth” in the global advertising industry.

However, China continues to exceed expectations, with GroupM China revising upwards its initial forecast of 6.6 percent growth to 7.8 percent. This contrasts with the Magna report, released yesterday by IPG Mediabrands, which initially forecast China’s ad market growth at 8.4 percent and revised it down to 7.2 percent.

Digital ad spend in China also grew significantly, with GroupM expecting it to hit 29.5 percent in 2016, but then drop to 21.5 percent in 2017. The report said China accounted for almost half of ad spend across Asia-Pacific this year (US$80 billion), while the region as a whole saw 5.8 percent growth; Magna forecasted 5.3 percent.

Interestingly, MAGNA forecast just 5.4 percent APAC growth in 2017, whereas GroupM is predicting a sharper rise of 6.3 percent.

Perhaps most telling was GroupM’s findings regarding the exponential growth of digital. Of every new ad dollar in 2016, digital accounted for 72 cents, and television 21 cents. This is forecast to move to 77 cents and 17 cents respectively in 2017, highlighting the ever increasing influence of digital advertising.

India is the fastest-growing market, worth more than US$10 billion, with growth of 13.8 percent this year, the report found. It remained the outlier regarding print ad sales, which is still the second-largest adspend market after television.