Dentsu Inc.'s overseas subsidiary, CARA, has conducted a periodic revision and new forecast of global advertising expenditure growth rates.

Carat, a media communications agency and overseas subsidiary of Dentsu Inc., forecasts global advertising expenditure growth rates twice a year (March and September) based on data collected from 59 regions worldwide. This revision confirmed the actual advertising expenditure growth rate for 2014 (forecast last September), revised the 2015 forecast, and introduced a new forecast for 2016.

■KeyPoints

2014 Global Advertising Expenditure Growth Rate (Actual)
・In 2014, all five regions (North America, Western Europe, Central and Eastern Europe, Asia Pacific, Latin America) achieved positive growth, aided by major events such as the Winter Olympics and Paralympics in Sochi, Russia, and the FIFA World Cup in Brazil.
・While actual results exceeded the September 2014 forecast in countries like Germany, Spain, and Japan, actual growth fell short of expectations in: - The United States, where print media decline was greater than anticipated (actual: 4.5% growth vs. September forecast: 4.9% growth) - Western Europe, where UK Christmas TV ad spending was lower than expected (actual: 2.3% growth vs. September forecast: 2.7% growth) and Central and Eastern Europe, facing geopolitical uncertainties (actual: +2.5%, vs. forecast: +3.5%). Consequently, the 2014 global advertising expenditure growth rate declined slightly from the September forecast of +5.0% to +4.6%.

2015 Global Advertising Expenditure Growth Rate (Revised from September2014Forecast)
・The global advertising market in 2015 is projected to grow 4.6% year-on-year to $540 billion, an increase of $23.8 billion compared to the previous year.
・Digital advertising spending is projected to increase by 15.7% in 2015 (an increase of $17.1 billion).

North America
・North America is expected to continue its steady growth, with the 2015 advertising expenditure growth rate maintained at 4.5% year-on-year as forecast last September.
・The US, the world's largest advertising market, is expected to grow by 4.6% due to a robust economy. Digital advertising, including mobile, social media, and online video, is projected to expand by around 16%, offsetting the decline in print media. However, growth in television advertising, which holds the largest share, is expected to be modest at around 2%.

Western Europe
・After two years of negative growth in 2012 and 2013, Western Europe is projected to see a 2.3% year-on-year increase in 2014, followed by continued positive growth of 2.8% in 2015.
・In the UK, leading this growth, digital advertising spending is projected to increase by 12.1% in 2015, while television advertising spending is expected to grow by 6.9%. As a result, digital advertising spending is anticipated to account for 48.2% of total advertising spending, rising to 51.1% in 2016.
・France, which experienced negative growth for three consecutive years through 2014, is expected to emerge from negative growth between 2015 and 2016, supported by increased advertising spending in sectors such as automotive.
・In Southern Europe, where economic recovery has been pronounced, Spain, which saw significant growth of 5.8% in 2014, is projected to maintain high growth in the high 6% range from 2015 to 2016.

Central and Eastern Europe
・Central and Eastern Europe, including Russia, is forecast to see a 2.2% year-on-year decline in 2015 due to geopolitical instability.
・Russia, in particular, is expected to experience economic stagnation due to factors such as falling oil prices and a weak ruble. Consequently, the forecast for 2015 has been significantly revised downward to a 7.1% decline, compared to the 5.0% growth projected last September. Notably, while most advertising media in Russia are expected to see negative growth, digital advertising expenditure is projected to grow strongly, increasing by 15.9%.

Asia-Pacific
・China, the world's second-largest advertising market, is projected to see advertising expenditure growth of 7.9% year-on-year in 2015, unchanged from the September 2014 forecast. Television, which holds the largest share of the Chinese advertising market, is expected to grow by around 5%, while digital, now the second-largest advertising medium, is projected to grow by 20.5%.
・India, with its stable government, is expected to maintain high growth. Consequently, the 2015 forecast has been revised upward from the 9.0% growth projected last September to 11.0%.
・Japan, the world's third-largest advertising market, has been revised downward from the 1.7% growth forecast in September last year to 0.9% growth. This revision reflects the fact that the 2014 forecast of 2.0% growth was exceeded by actual growth of 2.9%, and that the planned consumption tax hike from 8% to 10% scheduled for October 2015 was postponed to April 2017, eliminating the anticipated "rush demand" within 2015. Advertising spending in Japan has exceeded the previous year's level for four consecutive years, and positive growth is expected to continue through 2016.

Latin America
・In Brazil, where the economic slowdown persists, advertising expenditure growth is also expected to moderate slightly. The growth forecast for 2015, made last September, has been revised downward from 8.1% year-on-year to 6.6%.
・While Brazil slows slightly, stable growth is expected in other Latin American countries. In Argentina, inflation impacts advertising spending. Consequently, the region as a whole is projected to see double-digit growth of 11.1%.

2016 Global Advertising Expenditure Growth Rate (New Forecast)
・For 2016, major events including UEFA Euro 2016, the Rio de Janeiro Olympic and Paralympic Games, and the US presidential election are expected to drive global advertising spending to a 5.0% year-on-year increase. ・The digital shift continues, with digital advertising spending projected to expand its share of the global advertising market to 25.9% in 2016.

(Note) Carat independently analyzes and estimates advertising expenditure growth rates across 59 regions based on information gathered through its global network. Media covered include television, newspapers, magazines, radio, cinema advertising (cinema ads), outdoor/transport advertising, and digital.

 

Dentsu Inc. News Releasehttp://www.dentsu.co.jp/news/release/2015/0325-004000.html