Carat predicts Digital spend to reach more than 25% of total advertising spend in 2016, fuelled by upsurge in mobile advertising spending in 2015
24 Mar 2015
Carat, the leading global media network, today publishes its first forecast for worldwide advertising expenditure in 2016, combined with its latest forecasts for 2015 and actual figures for 2014, with all markets ring-fencing Digital media spending, even when faced with negative economic headwinds.
Based on data received from 59 markets across the Americas, Asia Pacific and EMEA, Carat’s latest global advertising expenditure forecasts show Digital media, with a predicted US$17.1 billion or +15.7% 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% and Online video of +21.1% 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%.
From a global perspective, Carat forecasts that in 2015 advertising spend across all media will increase by US$23.8 billion to reach US$540 billion, accounting for a +4.6% year-on-year increase. Market optimism continues into 2016 with Carat’s first forecast for the year predicting a year-on-year global advertising growth of +5.0%.
In 2014 all regions reported positive growth, from Western Europe at +2.3%, +4.5% in North America, +5.3% for Asia Pacific and high performing Latin America at +11.4%. 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. North America continues to grow at a solid pace of +4.5% in 2015 and +4.6% in 2016, with programmatic spending in the US predicted to grow by +137%, reaching spend levels of US$10billion.
By media, whilst Digital is the star performer in terms of growth, achieving higher that predicted levels in 2014 of +17.4% and accounting for 21.7% of market share, TV will continue to command the majority of market share for the foreseeable future, reaching 42.7% in 2014, and is predicted to grow by more than +3% year-on-year in 2015 and 2016. The steady decline in Print* is expected to continue, however Out-of-Home is now positioned as the second fastest growth media, behind Digital, with a global market share of spend of 7.1%. For the first time, Out-of-Home is predicted to outpace Magazines global share of advertising spend, with Magazines forecast to achieve 6.9% market share in 2015, and with continuing declines for this media, it is predicted to fall behind Radio for the first time in 2016.
Commenting on the Carat Advertising Expenditure forecasts, Jerry Buhlmann, CEO of Dentsu Aegis Network, said:
“Carat’s latest advertising forecast gives us increased optimism for the outlook for global advertising spending. 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 and this is reflected in the innovative services and approach we are discussing with our clients.”
Global Head of Corporate Communications
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Notes to Editors
*Print: ‘Print’ is defined as the combined advertising spend of Magazines and Newspapers
Digital: 'Digital Advertising' or 'Digital Media' or 'Digital' includes advertising spend from Search, Display, Online Video, Social Media and Mobile.
Methodology: Carat's advertising expenditure forecasts are compiled from data which is collated from around the Carat network and based on Carat's local market expertise. We use a bottom-up approach, with forecasts provided for 59 markets covering the Americas, EMEA, Asia Pacific and Rest of World by medium - Television, Newspapers, Magazines, Radio, Cinema, Out-of-Home and Digital Media. The advertising spend figures are provided net of negotiated discounts and with agency commission deducted, in current prices and in local currency. For global and regional figures we convert the figures centrally into USD with the average exchange rate. The forecasts are produced bi-annually with actual figures for the previous year and latest forecasts for the current and following year.
View the full PDF version: Carat Advertising Spend Forecast – March 2015