"Global Advertising Expenditure Growth Forecast" Released

The text of the Dentsu Inc. news release distributed on June 14 is as follows.

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June 14, 2018

◆Global advertising expenditure in 2018 is projected to exceed $600 billion, reaching a record high(Chart 1)

▷Projected to grow for 10 consecutive years from 2010 to 2019(Chart 1)
▷ Upward revision compared to the previous 2018 forecast (January 2018): 3.6% → 3.9%, driven by the world's two largest markets, the US and China (Chart 4)

◆By media type: Digital, with double-digit growth, surpasses TV to become the top share(Charts 2, 3)

▷Digital is projected to exceed a 40% share in 2019(Figure 3) Dentsu Aegis Network (Headquarters: London, UK), the overseas headquarters of Dentsu Inc., has compiled the "Global Advertising Expenditure Growth Forecast" (*1) based on data collected from 59 countries and regions worldwide. This update confirms 2017 actual figures, revises the 2018 forecast, and introduces a new forecast for 2019.

With the 2018 global advertising expenditure growth rate projected at 3.9% (previous forecast: 3.6%), total advertising expenditure is expected to reach $613.5 billion, a record high. Furthermore, robust growth (projected at 3.8%) is anticipated for 2019, driven globally by digital advertising. This will mark the tenth consecutive year of positive growth for total global advertising expenditure since 2009, when it was impacted by the Lehman Shock.

Digital advertising spending, in particular, remains robust, with double-digit growth projected to continue. Consequently, in 2018, digital advertising's share of global advertising spending reached 38.4%, surpassing television advertising spending for the first time. It is projected to exceed 40% in 2019.

< Chart 1: Global Advertising Expenditures (by Region) >

■Digital Advertising Driving the Global Advertising Market

Global digital advertising spending is projected to maintain double-digit growth, rising 12.6% in 2018 (as previously forecast) and 11.3% in 2019. Online video advertising and social media advertising are the primary drivers, with 2018 growth rates expected to be 24.6% (previous forecast: 24.5%) and 21.6% (previous forecast: 23.5%), respectively. Digital advertising for mobile devices surpassed desktop PC advertising in 2017, reaching a 50.3% share of total digital advertising spending. This share is projected to increase further to 52.2% in 2018.

As a result, digital advertising expenditure is projected to account for 38.4% ($230.6 billion) (※2) of total global advertising expenditure in 2018, surpassing television advertising expenditure for the first time, which is projected to account for 35.5% ($213.2 billion) (※2). Furthermore, in 2018, digital is projected to become the top medium for advertising expenditure in 21 of the 59 countries and regions surveyed.

< Figure 2: Forecasted Growth Rates by Media Type >

<Figure 3: Forecasted Share by Medium> (※2)

■Overview of 2018 Forecast

The upward revision for 2018 is driven by robust growth in major advertising markets, particularly the continued expansion of digital advertising, and contributions from major events such as the 2018 PyeongChang Winter Olympics and Paralympics, the 2018 FIFA World Cup Russia, and the U.S. midterm elections.

All regions except Latin America saw upward revisions, driven by robust performance in the world's top two markets (the US and China), as well as Western European countries like the UK and France, and Eastern European nations such as Russia.

Meanwhile, Japan, the world's third-largest advertising market, is projected to grow by 1.5% in 2018, reflecting its moderate and stable economic growth. This represents a slight downward revision from the previous forecast of 1.6%, primarily due to the actual growth rate exceeding expectations in the previous year (forecast: 1.0%, actual: 1.6%).

< Chart 4: Actual and Forecast Growth Rates for Major Countries >

※1 Dentsu Inc. Aegis Network (DAN) independently analyzes and estimates advertising expenditure growth rates for 59 countries and regions based on information gathered through its global network, publishing results twice yearly. Covered media include TV, newspapers, magazines, radio, cinema (cinema advertising), outdoor/transport, and digital.

※2 For Japan's advertising market only , advertising expenditure for media not listed in ※1 (e.g., inserts, DM, free papers/magazines, POP, etc.) is included. Therefore, for the media share forecast, the portion excluding these elements is treated as the "global total advertising expenditure" (approximately $600 billion), and the share for each medium is calculated based on this figure.

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Dentsu Inc. News Release
http://www.dentsu.co.jp/news/release/2018/0614-009553.html