Right promising 2015 for ad spending
Will finally return to pre-recession levels worldwide
August 15, 2014
After two years of recession and five years of recovery, the worldwide media economy is finally getting back on track.
Global ad spending finally will rise above its 2007-2008 pre-recession levels next year for the first time, according to a new forecast from GroupM.
Worldwide spending will hit $534 billion this year, up 4.5 percent over 2013. In 2015, that will increase to $560 billion, up another 5 percent.
Though the recovery has been slow, it’s also been sustained. The global media economy has grown steadily since 2010 after going off a cliff in 2008.
Those steady gains have been spurred by sharper ad spending increases in a handful of smaller countries, the increased adoption of digital media by advertisers, and a general rise in confidence in the global economy.
Among developing countries, Brazil, Russia, India and China will continue to post rapid growth, though GroupM did reduce its forecast slightly for Russia, from 10 percent to 6 percent growth over the next few years, because of the worsening state of affairs in the country.
In addition to the BRIC countries, Nigeria, Kenya and Vietnam will continue to see steady growth.
Digital media will also play a big role in global ad spending’s rise.
GroupM says Western Europe, which struggled mightily during the recession, has become the most digitized ad region in the world, with double-digit percentage gains in 2014 and single-digit percentage increases expected in 2015.
That has helped to balance out the region’s big declines, though the Eurozone still remains 20 percent below its 2007 advertising peak. Greece, Ireland, Spain, Italy and Portugal have been the hardest hit.
Finally, advertisers generally seem more convinced of a lasting recovery than they had been the previous few years.
The best example of that may be seen in the United States. This year is an election year, which means much of U.S. ad spending growth will be from political dollars. GroupM predicts ad revenue will be up 3.4 percent in 2014.
But in 2015, an off political year when there’s also no Olympics or World Cup to drive spending, U.S. ad spending will jump by 4.2 percent. That’s more than double the rate for the last non-election year, 2013, when spending rose by 1.8 percent.
That reflects advertisers’ greater confidence in the economy. They’re willing to invest in advertising because they believe people are finally abandoning the tight spending controls they adopted during the recession and are ready to start buying advertisers’ products again.
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