IPG Mediabrands has become the first of three major advertising groups to increase its 2019 global advertising forecast—from a prediction of 4.7% growth in December 2018 to 5% today.
The agency’s insight arm Magna has predicted that global advertising revenues will reach US$600 billion in 2019, representing the tenth consecutive year of growth.
It cited stronger-than-expected advertising activity in the first half of 2019 in several key markets, including the US and China, as a reason for upgrading its forecast.
While the overall global figure is less than other predictions, Magna is notably the first to upgrade its 2019 outlook.
Last week Dentsu downgraded its global ad growth forecast from 3.8% (as of January 2019) to 3.6%, while GroupM downgraded its forecast even lower from 3.6% (as of December 2018) to 3.4% for 2019.
Dentsu cited slowing growth in China as well as trade tensions as factors contributing to the revised forecast, while GroupM global president of business intelligence Brian Wieser said the “economic foundations supporting the advertising industry are somewhat fragile at this time”.
Magna’s 5% growth rate is still down from the 8% record growth rate recorded in 2018, which the business said is mostly due to the lack of major cyclical events such as the US elections and FIFA World Cup this year.
The same factors will affect editorial media types (TV, print, radio, out-of-home, digital display, banners and video) that traditionally benefit the most from these types of world events.
It predicts that editorial ad revenues will stagnate at $366 billion this year, while direct digital ad sales, including search and social formats, will grow by 15%.
Overall, digital advertising revenues will grow by 14% this year to reach $304 billion, representing more than half (51%) of the total global advertising economy for the first time. It further predicts digital advertising togrow by double digits again (+11%) in 2020 to reach $338 billion, representing 54% of total advertising budgets.
Social media will be the fastest-growing digital format in 2019 (+23%) ahead of video (+22%), and search (+13%).
Meanwhile, this year traditional linear ad sales will decrease by -3%, television ad revenues will shrink by -2%, print ad sales will decline by -10% and radio by -1%. Out-of-home will continue to outperform traditional media, growing by 5%.
Asia Pacific is fastest growing advertising region
With a growth rate of 7.4% to US$186 billion, Asia Pacific will be fastest growing advertising region in 2019, followed by Latin America with 7.3%.
Both EMEA and North American are predicted to slow down considerably in 2019, from last year's 6.1% and 9.5% growth rate, to 4.8% and 3% this year, amidst economic slow-down and political uncertainty in many European markets.
APAC remains the second largest advertising market, behind North America and ahead of EMEA. It will increase its share of the global advertising market, from 31% to 33% to global advertising spending by 2023.
China (44% of APAC market) and Japan (23%) represent two-thirds of total APAC advertising revenue, while the fastest-growing markets are in the Indian sub-continent: India (+15% in 2019), Sri Lanka (+14%), and Pakistan (+15%).
On the other end of the spectrum, Singapore (+1%), Malaysia (+2%) and Thailand (+2%) will show little advertising growth in 2019.
Advertising growth in APAC continues to be driven by digital formats. Digital advertising sales will increase by 16% in 2019 to reach $90 billion, representing 49% of total ad sales. Mobile impressions and clicks are now attracting the bulk of digital advertising spend in the region, reflecting the continuing rise of smartphones in APAC consumers. Mobile ad spend will grow by 26% in 2019, compared to -5% loss for desktop spend.
APAC is one of the few regions where linear sales are still expected to be positive in 2019, increasing by 0.4%. In EMEA and North America, linear growth expectations are negative in 2019.
Overall, GroupM had a slightly higher prediction for the market, with a 4.9% growth for a total advertising spend of US$209 billion.