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

Carat, a media and 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 time, they revised the growth rates for 2015 and 2016, originally published in March 2015. Below are the estimated figures for the total of all 59 regions worldwide, as well as for major regions/countries, from this forecast, which is considered a key indicator for gauging the direction of advertising markets globally.

■Key Points

Global Advertising Expenditure Growth Rate for 2015 (Revision of March 2015 Forecast)

・The 2015 global advertising market has been revised slightly downward from the 4.6% growth forecast in March 2015. The main factor is the recent economic slowdown in China and Russia. As a result, global advertising spending in 2015 is projected to reach $529 billion (previous forecast: $540 billion). Furthermore, growth of 4.7% is expected in 2016, representing an additional increase of approximately $25 billion.

・Within the global advertising market calculated across seven media types, television holds the largest share, projected at 42.0% in 2015 (previous forecast: 42.2%) and 41.3% in 2016 (previous forecast: 41.7%). Conversely, driven by accelerated digital shifts such as increased spending on mobile and online video, the share of digital advertising expenditure is projected to grow to 24.3% in 2015 (previous forecast: 23.9%) and 26.5% in 2016 (previous forecast: 25.9%).

・Regionally, the global advertising market is expected to be positive worldwide in 2015, with North America growing 4.2%, Western Europe 2.6%, Asia Pacific 4.1%, and Latin America 12.7%. Furthermore, all regions, including Central and Eastern Europe, are projected to experience positive growth in 2016.

・In Western Europe in 2015, while Greece is expected to see a 12% decline in growth due to political turmoil, the robust forecasts for the larger markets of the UK (6.4% growth) and Spain (6.9% growth) are expected to offset Greece's negative performance.

・In Asia-Pacific, while affected by China's economic slowdown, the region as a whole is expected to expand steadily, supported by high growth in the Indian market and contributions from the robust Australian market.

Global Advertising Expenditure Growth Rate for 2016 (Revised from March 2015 Forecast)

・Although the 2016 advertising market forecast has been revised downward from the previous March 2015 projection, global economic growth expectations continue to point to 4.7% growth. This outlook is underpinned by a series of major events, including the UEFA European Football Championship, the Rio de Janeiro Olympic and Paralympic Games, and the U.S. presidential election.

・By region, North America is projected to grow at a high rate of 4.5%, slightly down from the previous forecast. Western Europe is expected to grow by 2.9% overall, driven by strong growth in the UK and recovering Spain, plus France now projected to exceed the previous forecast. Central and Eastern Europe, however, faces continued challenging economic conditions, leading to a downward revision from the previous forecast of 3.9% growth to 1.6%. Asia-Pacific is expected to see a downward revision from 5.8% to 4.7% growth for the region as a whole. This is due to China, the world's second-largest advertising market, growing below the previous forecast, despite contributions from sustained high growth in various national markets, an upward revision for Japan, and the anticipated further rise of India.

Regional Breakdown

North America

* The US, the world's largest advertising market, is projected to grow by 4.3% in 2015 (previous forecast: 4.6%) and by 4.5% in 2016 (previous forecast: 4.7%), supported by campaign effects from the presidential election and the Rio de Janeiro Olympic and Paralympic Games. The downward revision was primarily due to the severe winter cold wave weakening personal consumption in the first half of 2015.

・In the U.S., digital advertising, including mobile, is expanding, and digital ad spending is expected to surpass television ad spending by 2018.

・Canada's advertising market declined last year due to the economic downturn, but shifted to moderate growth in 2015. Combined with the effect of the federal parliamentary election, it grew by 2.5%, and 3.0% growth is expected in 2016.

Western Europe

・Western Europe, which experienced negative growth of 0.6% in 2013, shifted to positive growth starting in 2014. Growth reached 2.8% in 2014, and is projected to be 2.6% in 2015 and 2.9% in 2016.

・The key growth drivers for 2015 are Spain, the UK, Ireland, and Portugal. Conversely, Greece, which was previously forecast to grow by 8.0% due to recovery expectations, has been significantly revised downward to a 12.0% decline, reflecting the impact of prolonged political turmoil. Recovery in the Greek advertising market is anticipated in 2016.

・The UK advertising market showed strong growth of 7.9% in 2014. Growth of 6.4% is forecast for 2015, buoyed by the expected impact of the Rugby World Cup. Furthermore, in 2016,

　UEFA European Football Championship and the Rio de Janeiro Olympic and Paralympic Games,

　.

・The German advertising market continues to grow at a steady pace. Following a 1.5% increase in 2014, growth is projected at 1.6% for 2015 and 1.7% for 2016.

・France's advertising market had experienced three consecutive years of negative growth but has finally entered a growth trend. Due to its robust performance since the first half of 2015, growth projections for both 2015 and 2016 have been revised upward from previous forecasts.

・Spain's advertising market has boasted the highest growth rate in Europe since the start of 2015. With general elections scheduled for November and robust consumer trends, corporate advertising spending is also increasing. Growth of 6.9% is expected for both 2015 and 2016.

Central and Eastern Europe (C&EE)

・The 2015 advertising market in C&EE has been revised downward from the previous forecast of a 2.2% decline to a 6.0% decline. This is primarily due to the downturn in the Russian economy. However, with the outlook for recovery beginning in mid-2016, the advertising market is expected to see positive growth of 1.6% in 2016.

・Poland and Turkey, the second and third largest advertising markets in C&EE, are expected to show low single-digit growth rates in both 2015 and 2016.

Asia Pacific

・The Asia Pacific region has revised downward its advertising market growth rates for both 2015 and 2016 due to the impact of slowing economic growth. The slowdown in China, the world's second-largest advertising market, is having a particularly significant effect. Furthermore, among the 14 Asia-Pacific markets, growth rates for 2015 and 2016 have been revised downward from previous forecasts for seven markets—Indonesia, Hong Kong, Taiwan, and Malaysia—due to global economic trends. Conversely, India, the Philippines, and Vietnam are expected to show double-digit growth in their advertising markets for both 2015 and 2016, supported by robust economic expansion.

・Australia's advertising market has been lackluster over the past four years, but with signs of economic improvement, it is expected to see positive growth in 2015 and continue expanding steadily in 2016.

・Regarding Japan, the world's third-largest advertising market, the previous forecast anticipated a weak market due to the absence of last-minute demand following the postponement of the planned 2015 consumption tax hike to 2017. However, due to factors like the weak yen, Japanese corporate earnings in the first half of 2015 exceeded expectations. Consequently, the advertising market is expected to continue growing, albeit at a moderate pace, exceeding the previous forecast.

Latin America

・Latin America is the region with the highest growth outlook for both 2015 and 2016. While Brazil's advertising market is performing well, partly due to the effect of the 2016 Rio de Janeiro Olympics and Paralympics, the growth rate for 2015 has been revised downward due to the perceived slowdown in the Brazilian economy.

・However, Latin America as a whole is projected to achieve double-digit growth in both 2015 and 2016. This is due to upward revisions for markets like Argentina, where inflation is expected to boost advertising growth, and Colombia, which is anticipated to maintain stable economic growth.

(Note) Carat independently analyzes and estimates advertising expenditure growth rates for 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.

Carat News Releasehttp://www.dentsu.co.jp/news/release/2015/0924-004166.html