Dentsu Aegis predicts APAC to be leading contributor to global ad spend growth

Advertising spend in Asia Pacific is set to grow by 4% in 2019, taking the total investment to US$216 billion, according to a report by Dentsu Aegis Network. The region is also predicted to be the leading contributor (39%) to the global ad spend increase of US$20.9billion in 2019 compared to the previous year.

The study, based on data from 59 markets, predicts global growth will increase by 3.6% to US$609.9 billion in 2019, following growth of 4.3% (US$24.4billion) in 2018. After APAC, North America is the next largest contributor to global growth at 34%, followed by 14% in Western Europe.

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Despite the high performance, forecasts for APAC have been revised downwards (-0.5%) from January forecasts following “market softness” at the beginning of the year, particularly for TV, and the lack of major events scheduled.

“Asia Pacific has long been the melting pot of digital and technology developments. Though we have been facing a tougher economic environment, our ad spend forecast has shown that digital connectivity in APAC remains at its peak and consumer adoption rates have leapfrogged,” said Takaki Hibino, executive chairman at Dentsu Aegis Network Asia Pacific.

Globally, digital channels are expected to dominate the advertising spending, taking 41.8% of global share this year, and nearly 45% by the end of 2020. It is forecast to grow 11.5% in 2019 to reach US$249.7 billion. Mobile, meanwhile is fastest-growing at 21.4% in 2019. Powering this growth is the increasing consumption of video on mobile, from Instagram Stories, TikTok and Snapchat to YouTube and VOD, according to the press release. Online video, in particular, is forecast to grow 20.5% in 2019.

On the traditional medium front, out-of-home sees continued growth at 4.3% in 2019 to reach 6.3% share. Growth is driven by innovations in DOOH. In contrast, TV ad-spend is forecast to shrink slightly in 2019 (-0.1%) with a return to modest growth in 2020 of 0.6%. Into 2020, growth will be driven by more dynamic TV opportunities and innovation as the penetration of smart TVs continues, said Dentsu Aegis Network. Traditional print meanwhile, sees accelerated decline from the company’s January 2019 forecasts, with newspapers slipping by 7.7% and magazines by 7.4%.

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