Global advertising expenditure is expected to grow to US$579 billion, up 4.7% from 2015, according to Zenith Media. However on a regional basis the Chinese economy might impact the regional ad markets.
China, Malaysia, India, Indonesia, Pakistan, Philippines, Taiwan, Thailand and Vietnam, which have been categorised as Fast-track Asia, recorded the highest growth rate among all the regions, at 9%, in the global market between 2015 to 2016.
However, according to Zenith Malaysia CEO Gerald Miranda, China accounts for 74% of adspend in Fast-track Asia, “so its slowdown naturally has a large effect on the region as a whole”.
“We expect ad expenditure in Fast-track Asia to grow 8.9% in 2015, and at an average rate of 8.4% a year between 2015 and 2018, down from 14.7% a year between 2009 and 2014,” Miranda added.
The study also stated that the Fast-track Asia economies grew extremely rapidly over the years as they adopted Western technology and practices, while benefiting from the rapid inflow of funds from investors hoping to tap into this growth.
“Fast-track Asia barely noticed the 2009 downturn (ad expenditure grew by 7.9% that year) and since then has grown very strongly, ending 2014 up an estimated 10.7%,” he said.
In Malaysia, adspend for year-to-date November 2015 slipped 3.2 %to RM12.395 billion from RM12.811billion in the corresponding period in 2014.
Pay TV accounted for the lion’s share of ad spend with RM5.2 billion followed by newspapers, RM3.81 billion and fee-to-air TV with RM2.603 billion. With the exception of PayTV which experienced a 6.4% increase, ad spend for free-to-air TV and newspapers dropped by 11.3 per cent and 10.7 per cent respectively. According to Miranda the industry estimated ad spend for 2015 to be softer by around 3%.
Globally, this year will be a big year given that there will be major hikes in conjunction with quadrennial events like the Rio Summer Olympics, US Presidential Elections and the European Football Championships.
Zenith Media in its latest ad expenditure forecasts predicts internet ad spend which grew 18% year on year by the end of 2015, to register growth rates of an average of 13% annual growth between 2015 and 2018. By 2018, internet advertising is expected to account for 36% of all global advertising, overtaking television for the first time to become the world’s largest advertising medium.
The global ad market which has enjoyed stable growth rates ranging between 4% and 5% a year since 2011, is expect it to maintain this pace between 2016-2018. Since it began in the mid-1990s, internet advertising (both desktop and mobile) has principally risen at the expense of print. Over the last ten years internet advertising had risen from 6% of total global spend in 2005 to 29% in 2015.
Meanwhile newspapers’ share of global spend fell from 29% to 13%, while magazines’ dropped from 13% to 7%.
The spend on newspapers and magazines is predicuted to shrink, at average rates of 4% and 3% a year respectively, between 2015 and 2018, ending with respective 10% and 5% market shares.
Print titles will continue to lose market share as their readership continues to decline, either move to online versions of print brands or other forms of information and entertainment entirely. The figures for newspapers and magazines include only advertising in printed editions of these publications, not on their websites, or in tablet editions or mobile apps, all of which are reflected in the internet category. The performance of print editions does not wholly describe the overall performance of newspaper and magazine publishers.
“Mobile is now the main driver of global adspend growth and we forecast this medium to contribute a full 87% of all the extra adspend between 2015 and 2018. Television and desktop internet will be the second and third- largest contributors respectively, accounting for 13% and 6% of new ad expenditure respectively,” said Miranda.
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