Dentsu Aegis Network says global ad spend growth will pick up by 0.5% on 2017 to a rate of 3.6%, boosted by major public events like the PyeongChang Winter Olympics in South Korea next month and US midterm elections in November.
With other events such as the Commonwealth Games being hosted in Australia and the 2018 Jakarta Asian Games, the APAC region will top that, increasing by 0.7% to a 4.2% ad spend growth rate. This makes it the leading world region contributing to growth in 2018 with almost 40% of ad spend coming from Asia.
Both these estimates are, however, more conservative than those released towards the end of last year.
Group M’s ‘This Year, Next Year’ media and marketing forecast published at the beginning of December put world growth at 4.3% and APAC growth at 5.4%; MAGNA’s December update put global at 5.2% and APAC growth at 5.9%; and while Zenith had slightly lowered the 4.2% rate it predicted in September for world growth to 4.1% by December, this still remains half a percent higher than DAN’s new figure.
Rates of growth within Asia will also be highly variable. Zenith’s September report grouped Asian countries into ‘fast-track Asia’ and ‘advanced Asia’, with both India and China (plus Indonesia, Malaysia, Pakistan, Philippines, Taiwan, Thailand and Vietnam) placed in the former. DAN’s report, however, notes that while growth rates are expected to continue to accelerate in India (from 9.6% in 2017 to 12.5% in 2018, and again to 12.5% in 2019) thanks to a healthy economic trajectory, the World Cup Cricket and elections in eight states this year, in China growth rates will slow down, from 6% to 5.4%, and will continue to slow to 5.3% in 2019.
Australia, which Zenith categorises as 'advanced Asia', will experience an unexpected online growth deceleration from 15.9% in 2017 to 6.9% in 2018. The report attributes the mature Australian market, ad fraud and data accuracy issues and an economic slowdown for the trend. TV ad revenue will decline more slowly than in previous years, at a rate of just 0.5%, meanwhile, and CBS's takeover of the Ten Network, approved in November, is expected to add dynamism to the market this year.
Where DAN’s report concurs with the others is in its assessment that digital ad spend will, inevitably, continue to drive global growth, with online video and social media seeing the highest year on year increases in 2018. Developments in voice search are expected to boost spend in paid search, thanks to the increasing popularity of voice-activated devices like Amazon’s Alexa.
DAN's forecast is based on data received from 59 markets.