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GLOBAL AD MARKET GROWING TO $539 BILLION!

9/13/2016

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With positive economic signs at home and abroad, the advertising market is looking up. This year, according to the global forecast, the ad market is expected to grow a healthy 4.4% to $539 billion in total spending, according to a new report by Zenith Media, up slightly from Zenith’s June forecast of 4.1% annual growth.
With positive economic signs at home and abroad, the advertising market is looking up. This year, according to the global forecast, the ad market is expected to grow a healthy 4.4% to $539 billion in total spending, according to a new report by Zenith Media, up slightly from Zenith’s June forecast of 4.1% annual growth.

Meanwhile, the U.S. ad market is similarly strong this year, with Zenith forecasting 4.4% growth in ad spend, powered by even-year events including the Summer Olympics and presidential elections.
Looking ahead, Zenith expects the U.S. market to slow slightly next year, but still post positive growth at 3.8%, followed by a 3.5% rise in 2018.

Radio ad spending is expected to reach $17.57 billion this year, flat with last year, and the medium is anticipated to hold steady through 2018. Zenith’s projections include network radio, which attracted $1.17 billion in ad spend in 2016, and local radio, which accounted for $16.4 billion.

Among radio advertising categories, Zenith says spending is strong by telecom, retail, restaurants and insurance-health care clients. And while radio broadcasters have been hopeful about increasing their share of political advertising this year, Zenith says radio stations are still waiting for that potential windfall, which should come later this fall.

Of radio stations’ hopes for more political ad dollars, the report notes: “Many are counting on this to make budgets. The majority of political spend continues to favor TV, but in some key battleground markets, radio could take the overflow from sold-out TV news dayparts.”
Among media, digital is posting the strongest advertising gains. “Digital, particularly mobile, continues to take dollars away from print media as consumers use mobile apps and other outlets to consume content digitally,” the report notes.

Total digital ad spending is estimated to hit $60.3 billion in 2016, up from $51.6 billion a year ago. Looking ahead, Zenith projects digital media advertising will reach $78.2 billion by 2018. Among digital subcategories, Zenith says demand is strong for social media advertising, digital video and mobile. But while demand for digital continues to grow as marketers look to reach consumers across Internet platforms, Zenith cautions that brands will demand that digital platforms prove out ROI, just like other media. “The promise of digital hinges upon accurate measurement and analytics wherewithal. As dollars move to digital, they need to be supported by the right framework to measure results—specifically consistent business impact such as incremental revenue vs. other channels,” the report states.

Also of interest to radio broadcasters, Zenith expects Internet radio advertising to reach $1.36 billion this year, up from $1.19 billion in 2015, and hit $1.83 billion by 2018, while podcast advertising is beginning to get some momentum, reaching $35 million in 2016, compared to just $22 million in 2007, and reaching $38 million in two years.

The television advertising industry is faring slightly better in Zenith’s latest report, besting earlier projections. Thanks to increased spending by drug companies and a slight shift of ad dollars by consumer packaged goods from digital to TV—as well as a positive upfront season for TV networks—Zenith now expects overall U.S. TV advertising will grow 1% this year, compared to the -1.5% projected earlier, followed by flattish growth the next two years.

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