Global ad spend is tipped to keep growing despite speculation that Brexit will negativity impact the market, according to a new report from Zenith.
Overnight Zenith predicted that global advertising expenditure will grow by 4.4% this year to reach US$539 billion, ahead of the 4.1% it previously forecast in June.
Zenith upgraded its forecasts due to stronger than expected growth in the US, the Philippines and Western Europe. The media agency has also made slight upgrades surrounding Asia Pacific, with the region now expected to grow 6.3% this year as opposed to the 6.2% it previously predicted.
The latest update to Zenith's numbers also found that ad dollars are flowing to mobile even faster than expected, with desktop's declines expected to ramp up over the coming years. By 2018 the numbers predict mobile will account for 60% of all internet advertising, up from its previous forecast of 58%.
Zenith also found advertisers reacted calmly to Brexit, outlining that despite the results of the EU referendum shocking many, the UK's ad spend growth forecast has only dipped slightly to 5.4% from 5.6%. However this doesn't mean that there may not be some ramifications in the long-term, with Zenith noting the UK’s new terms of trade with the EU and other countries – whatever they turn out to be – are likely to restrict flows of trade and investment in comparison with the pre-Brexit status quo, leading to slower economic growth and slower growth in advertising expenditure.
Head of forecasting at Zenith, Jonathan Barnard, says: “So far any impact from the vote for Brexit has been limited and confined to the UK. We expect the global ad market to strengthen further in 2017 and 2018.”
Looking to the year ahead, Zenith predicts expenditure will grow by 4.5% and then by 4.6% in 2018 – up from the previous growth forecasts for both years, which were 4.3% and 4.4% respectively. By 2018 global advertising expenditure is expected to total US$589bn, which is US$4bn more than forecast in June.
These numbers from Zenith mirror the predictions made by Carat in its latest global forecast released last week. Carat estimates that global advertising spend is forecast to increase 4.4% to US$548.2 billion, led by strong growth in India (12%), Latin America (10%) and Russia (6.2%).
Carat also has the Australian market in growth, outlining that the local advertising market is predicted to generate above average growth of 5.4%, fuelled by strong double-digit increases in digital advertising.
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