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Mobile advtg to push digital to over 25% of all ad spends: Carat

Mobile advertising is on the rise, and now there are numbers to vindicate this. In its first forecast for worldwide advertising expenditure in 2016, combined with its latest forecasts for 2015 and actual figures for 2014, Carat predicts that powered by a dramatic rise in mobile ad spending globally of 50 per cent and online video of 21.1 per cent predicted in 2015, digital will, for the first time, account for more than a quarter of all advertising spend in 2016 with a market share of 25.9 per cent.

The year also will see Asia Pacific continue its growth in ad spends. Primarily driven by China and India, APAC is predicted to grow at 5.8 per cent in 2016. The expected growth in 2015 is 5.2 per cent, and 2014 had clocked a 5.3 per cent growth rate.

“As global advertising expenditure grows so does APAC, with the historical driver China predicted to grow this year to RMB 514 million at a steady 7.9 per cent. Although TV still dominates, faced with the proliferation of smartphones and faster broadband speeds digital media now takes the second largest portion of ad spend in China with double digit growth predicted this year. India’s prospects are positive, following the 2014 general election success of the BJP. Brought to office with a clear mandate and a pro-business agenda, India looks to be one of the more attractive markets in APAC in the short to medium term. Japan performed better in 2014 than predicted,” explained Nick Waters, CEO, Dentsu Aegis Network, APAC.

Last minute demand before the increase in consumption tax in April gave the market a boost, as did the Sochi Winter Olympics and the FIFA World Cup. As Japan heads towards the 2020 Tokyo Olympics there is cause for cautious optimism.

It is digital, and Asia, again
Based on data received from 59 markets across the Americas, APAC and EMEA, Carat’s latest global advertising expenditure forecasts show digital media, with a predicted USD 17.1 billion or 15.7 per cent increase in spend in 2015, is outpacing previous Carat predictions from September 2014.

“A fully convergent and digital advertising landscape is rapidly becoming a reality, with a predicted 20.1 per cent growth in digital advertising spend this year in APAC – the most of any region globally. Asian markets are leading the adoption of internet related platforms and technologies, and this uptake will drive a boom in mobile commerce in the region this year. Online video demonstrates strong growth with more need for original ‘made for digital’ content. Those who understand and are able to support clients in their growing need for convergent communications solutions will benefit this year,” Mr Waters added.

Year on year % growth at current prices
2014 2015 2016
Global 4.6 (5.0) 4.6 (5.0) 5
Asia Pacific 5.3 (5.4) 5.2 (5.9) 5.8
Australia 0.3 (0.1) 1.0 (0.9) 1.5
China 7.6 (7.6) 7.9 (7.9) 8.1
India 8.7 (8.7) 11.0 (9.0) 11.3
Japan 2.9 (2.0) 0.9 (1.7) 1.2
Figures in brackets show Sept 2014 forecasts

Globally high
From a global perspective, Carat forecasts that in 2015 advertising spend across all media will increase by USD 23.8 billion to reach USD 540 billion, accounting for a 4.6 per cent year-on-year increase. Market optimism continues into 2016 with Carat’s first forecast for the year predicting a year-on-year global advertising growth of 5.0 per cent.

In 2014, all regions reported positive growth, from Western Europe (2.3per cent), North America (4.5 per cent), Asia Pacific (5.3 per cent) and high performing Latin America at 11.4 per cent. Regional confidence is predicted to continue in 2015 with all key markets forecasting positive growth next year except Russia, due to a struggling advertising market and predicted recession. Western Europe is strengthened by a second consecutive year of positive growth driven by strong numbers in the UK and Spain; as well Greece, Ireland, and Portugal returning to positive growth after six consecutive years of ad spend declines. North America continues to grow at a solid pace of 4.5 per cent in 2015 and 4.6 per cent in 2016, with programmatic spending in the US predicted to grow by 137 per cent, reaching spend levels of USD 10 billion.

By media, whilst digital is the star performer in terms of growth, achieving higher that predicted levels in 2014 of 17.4 per cent and accounting for 21.7 per cent of market share, TV will continue to command the majority of market share for the foreseeable future, reaching 42.7 per cent in 2014, and is predicted to grow by more than 3 per cent year-on-year in 2015 and 2016. The steady decline in print is expected to continue, however Out-of-Home (OOH) is now positioned as the second fastest growth media, behind digital, with a global market share of spend of 7.1 per cent. For the first time, OOH is predicted to outpace magazines global share of advertising spend, with magazines forecast to achieve 6.9 per cent market share in 2015, and with continuing declines for this media, it is predicted to fall behind radio for the first time in 2016.

Commenting on the forecasts, Jerry Buhlmann, CEO of Dentsu Aegis Network, observed, “Carat’s latest advertising forecast gives us increased optimism for the outlook for global advertising spending. With harder times behind us, negative growth markets are pleasingly now a minority, and collectively we can look ahead to 2016 with positive growth predicted for all key markets.”

My Buhlmann acknowledged that the strength of digital continues to dominate discussions and the new distribution of spending. With a quarter of the global population now owning and relying on their smartphones daily, they are the second brain in a consumer’s hands. He said, “Mobile dominates the way consumers access information, view content, browse products and purchase goods and this is reflected in the innovative services and approach we are discussing with our clients.”

  Year on year % growth at current prices
2014 2015 2016
GLOBAL 4.6 (5.0) 4.6 (5.0) 5
NORTH AMERICA 4.5 (4.9) 4.5 (4.5) 4.6
USA 4.5 (4.9) 4.6 (4.6) 4.7
Canada 3.3 (3.3) 2.5 (3.1) 3
WESTERN EUROPE 2.3 (2.7) 2.8 (2.5) 2.8
UK 6.8 (7.5) 6.4 (4.7) 5.8
Germany 1.4 (1.0) 1.6 (1.5) 1.8
France -0.9 (-0.9) 0.0 (0.2) 0.2
Italy -2.0 (-1.3) 0.9 (0.9) 0.7
Spain 5.8 (2.6) 6.8 (3.3) 6.9
C&EE 2.5 (3.5) -2.2 (4.6) 3.9
Russia 3.8 (3.9) -7.1 (5.0) 4.5
ASIA PACIFIC 5.3 (5.4) 5.2 (5.9) 5.8
Australia 0.3 (0.1) 1.0 (0.9) 1.5
China 7.6 (7.6) 7.9 (7.9) 8.1
India 8.7 (8.7) 11.0 (9.0) 11.3
Japan 2.9 (2.0) 0.9 (1.7) 1.2
LATIN AMERICA 11.4 (12.1) 11.1 (11.8) 11.9
Brazil 9.5 (9.4) 6.6 (8.1) 8.4
Figures in brackets show our previous forecasts from September 2014


Noor Fathima Warsia

A veteran journalist in the Indian marketing, media and advertising fraternity, Noor Fathima Warsia took on the role of Group Editor -– APAC for Digital Market Asia in May 2013. Noor has focussed on tracking trends and developments in the Indian media industry.