Dentsu Inc. overseas subsidiary, KARA, has conducted its regular revision of global advertising expenditure growth rate forecasts.

Carat, the media communications agency of the Dentsu Group, forecasts global advertising expenditure growth rates twice a year (March and September) based on data collected from 59 regions worldwide. In March, it finalizes the previous year's results, revises the current year's forecast, and issues a new forecast for the following year. In September, it revises the figures forecast in March.

Carat has now revised its global advertising expenditure growth forecasts for 2014 and 2015, originally announced this past March. The global advertising market is projected to grow by 5.0% year-on-year in both 2014 and 2015. Japan's growth is forecast at 2.0% for 2014 and 1.7% for 2015.

The chart below shows estimated values for the total of 59 regions worldwide and for major regions/countries. This forecast serves as an important indicator for assessing the direction of advertising markets around the world.

■Key Points

2014 Global Advertising Expenditures

・The 2014 global advertising expenditure forecast has been revised upward from the 4.8% year-on-year growth projected in March to 5.0% growth. This revision reflects the greater-than-expected contribution from major events such as the Winter Olympics and Paralympics in Sochi, Russia, the FIFA World Cup in Brazil, and the U.S. midterm elections. Notably, Latin America is projected to grow significantly at 12.1% (revised from 12.8% in March), while the Asia-Pacific region is also expected to grow steadily at 5.4% (revised from 5.6%).

North America

North America is expected to continue stable growth. For 2014, the forecast has been revised upward from the March projection of a 4.3% year-on-year increase to a 4.9% increase. For 2015, the forecast remains unchanged from the March projection at a 4.5% increase. Driven by a robust economy, the US advertising expenditure for 2014 is projected to increase from 4.3% to 4.9%, surpassing the pre-Lehman Shock peak of 2007 for the first time.

Western Europe

・Western Europe (excluding the UK, which grew), which experienced negative growth in 2012 and 2013, is projected to return to positive growth in 2014 with a 2.7% year-on-year increase (up from the March forecast of 1.8%). This trend is expected to continue in 2015 with a 2.5% increase (up from the March forecast of 2.1%). The UK, in particular, is expected to see double-digit growth in digital advertising spending, with 2014 growth revised upward to 7.5% from the March forecast of 5.0%. France, however, continues to experience economic stagnation. Due to declines in advertising spending on television and print media, which have a high share of the market, 2014 growth is revised downward to a 0.9% decrease from the March forecast of a 0.8% increase.

Central and Eastern Europe

Central and Eastern Europe, including Russia, has revised down its 2014 and 2015 advertising expenditure forecasts announced in March due to geopolitical instability. Russia's 2014 advertising expenditure growth rate has been revised from the March forecast of an 8.0% year-on-year increase to a 3.9% increase, and the 2015 forecast has been revised from a 7.0% increase to a 5.0% increase.

Asia Pacific

・In Asia Pacific, consumption in Australia is sluggish due to the impact of fiscal austerity measures, the first in 20 years. The 2014 growth forecast has been revised downward to 0.1% from the March forecast of 2.1%. For China, year-on-year declines are expected in the real estate, beverage, and food sectors, leading to a slight downward revision of the 2014 growth forecast to 7.6% from the March forecast of 8.0%.

・Driven by the effects of Abenomics and the decision to host the 2020 Olympics and Paralympics, Japan's advertising expenditure growth rate is forecast to be 2.0% year-on-year in 2014 (up from the March forecast of 1.7% growth) and 1.7% in 2015, unchanged from the March forecast. Japan is expected to exceed the previous year's level for the fourth consecutive year.

Latin America

・Brazil's growth is slightly revised downward from 10.0% in March to 9.4% in 2014, due to lower growth in its largest sectors: retail and automotive.

Global Advertising Expenditures in 2015

・Global advertising expenditure for 2015 is maintained at a 5.0% year-on-year increase, as forecasted in March, reflecting the positive global economic outlook.

(*) Carat independently analyzes and estimates advertising expenditure growth rates for 59 regions based on information gathered through its global network. Advertising expenditure includes TV, newspapers, magazines, radio, cinema advertising (cinema ads), outdoor/transport advertising, and digital. Carat does not disclose actual or forecast advertising expenditure figures in news releases; this information is used as a service for individual clients.

Dentsu Inc. News Release
http://www.dentsu.co.jp/news/release/2014/0910-003819.html