Overall global ad spend to grow by 3.9% in 2018

TORONTO–Leading advertising and digital communications group Dentsu Aegis Network today released its biannual forecasts, pointing to a more positive 2018 for global advertising expenditure than previously expected

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. Global ad-spend growth will rise from 3.3% in 2017 to 3.9% in 2018 while Canadian ad spend, which remained flat in 2017, is expected to increase by 2.3% this year.

Globally, events such as the Winter Olympics & Paralympics, the FIFA World Cup and national elections will play an important role in stimulating growth. In Canada however, these events are less tied to an increase in ad spend but rather a re-allocation of funds with the exception of elections.

Commenting on the latest Canadian forecast, Hisham Ghostine, Chief Commercial Officer, Dentsu Aegis Network Canada, said:

“We continue to see positive momentum in the Canadian market with digital expected to represent more than half of all ad spending with mobile posting the largest gains over the next few years. As for TV, the increased cord-cutting trend may be offset by the rise in innovations such as programmatic and connected TV. While we do expect a variation in ad spending amongst some key sectors, we anticipate a continued upward trend in key markets including electronics, financial services and telecommunications.”

Commenting on the latest global forecasts, Jerry Buhlmann, CEO of Dentsu Aegis Network, said:

“In the context of synchronised economic growth across the US, Europe and Asia, these figures point to a more positive outlook today than at the beginning of the year and represent a modest but encouraging source of optimism. We are seeing upward revisions in most key markets, with emerging economies such as India showing high rates of growth. The US economy is growing strongly as economic stimulation and tax cuts filter through. Spend in China continues to grow at pace, though driven almost entirely by the ecommerce platforms, Alibaba, Tencent and Baidu.”

“Digital remains the dominant growth area with 25% of global advertising spend expected to be delivered through mobile for the first time. Digital is now the leading form of advertising in 21 out of the 59 markets we track.”

Intrinsically linked to the Canadian market, US ad spend is forecast to show continued growth in 2018, increasing by 3.4%. The Winter Olympics brought in around US$1.6 billion of advertising spend. Local TV is where politicians look to spend, with national TV reaching 90% of the US population. Mobile ad spend is forecast to grow by 21.2% in 2018, with the majority of spend going towards in-app advertising (80%).

Media trends

Mobile on the go
The mobile device is steadily becoming our primary point of access to all digital services and content. In 2018, 52.2% of all worldwide online traffic was generated through mobile phones, up from 50.3% in the previous year, according to Statista. People now spend an unprecedented amount of time on their smartphones—more than five hours a day, according to some estimates. This growth in usage is largely driven by the widespread availability of high-quality digital Video. Reflecting this, mobile is forecast to represent a quarter of global ad spend 25.2% this year.

Digital still calls the tune

Worldwide Digital media spend is forecast to increase by 12.6% in 2018, more than three times the rate of all media (3.9%), to reach US$230.6 billion—a US$25.7 billion incremental increase year-on-year. Online Video (+24.6%) and Social Media (+21.6%) are particularly strong. Paid Search continues to account for the largest share of digital (39%). As previously predicted, Digital will overtake TV for the first time this year to account for 38.4% share of total ad spend vs. 35.5%.

Dentsu Aegis Network Canada Innovates the Way Brands Are Built for clients through best-in-class capabilities in media, digital, data and creative communications services. The network’s focus on the digital economy and the distinctive products and services are delivered through agencies Amnet, Amplifi, Carat, Cardinal Path, DentsuBos, dentsu media, D2D, GRIP, ICUC, iProspect, Isobar, MKTG, The StoryLab, Vizeum and 360i. As one of the top ten global Dentsu Aegis markets, the Canadian team is headquartered in Toronto and serves clients through a national network of offices in Vancouver, Calgary, Montreal, Saint John and Halifax with more than 1,400 dedicated specialists.

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