Global marketing spend set to exceed $1tn in 2017, says Group M
GroupM, one of the world’s largest advertising media companies in terms of billings expects adspend to exceed $ 1 trillion in 2017.
It comes despite WPP network slightly downgrading expected adspend growth for 2016 to 4% from 4.5%. The slowing growth in China and Brazil was the main reason for the change.
Growth in China was revised down to 6.6% in 2016, from the previously expected 9.1% rise. It predicts China’s adspend to grow by 7% in 2017.
Group M China put this down to the “slowdown in fixed investment and profits affecting consumer demand”.
In Brazil, adspend was revised down from 7% to 1% because of the continuing recession, increasing unemployment, and political crisis.
Adam Smith, futures director at Group M, explained that the greater trend that came through during the research was the high interest in automation in digital.
He told Campaign: “It’s the first time I’ve had a comprehensive interest in programmatic.
“The idea of automation has great risks and possibilities. It provides a common platform for data management but equally it opens up risks around viewability and fraud.”
For the UK, Group M said there is no impact from the referendum to leave the European Union, although companies are expected to invest less over the next six months.
Smith added: “There is no evidence of a Brexit-driven recession at the time of this writing, and though some have deferred 2016 advertising investments, worst-case we still see that UK advertising growth will reach 4.5% this year, propelled exclusively by the growth of digital.
“Our base case remains 6.3%, which we will revise as usual in November.”
Digital adspend continues to grow at scale, however this is slowing. It was 18% in 2015, 14% in 2016 and expected to reach 12% in 2017. However, 99% of all net ad growth will be digital in 2016.
In traditional media, TV remains resilient, the report said. However it added that print is losing the most share.
Dominic Proctor, president for Group M Global, said: “The impact of media consumption migrating to digital platforms, and the flow of advertising investment with it, must not be underestimated by advertising clients.
“This fragmention of billions of consumer impressions across thousands of platforms demands the use of data and technology to create bespoke and meaningful targeted audiences for brands.
“This is the transition from media planning to audience planning and the reason why Group M continues to focus investment in talent and technology around data and analytics.
“We see this as crucial to creating sustainable marketplace advantage for our clients, and it’s an important dialogue we’re having which is increasingly and appropriately focused on performance versus the commodity pricing of media.” – Campaign UK