OOH will contribute $2.52bn to overall ad-pie in 2018-2021

A Zenith study predicts global ad expenditure is expected to grow 4.5% in 2018, reaching US$581bn by the end of the year. Their prediction for overall growth this year has therefore not changed since June, though the growth figures have shifted for most individual markets. The global agency’s prediction for 2019 has gone down from 4.2% to 4.0% followed by 4.2% in 2020 and 4.1% in 2021. According to the study, there is an expectation of advertising expenditure grow behind the global economy as a whole throughout our forecast period.

Fig: Growth of advertising expenditure and GDP 2018-2021 (%)

Source: Zenith/IMF

As per the report, Fast-track Asia which also includes India sees the highest growth in adspend by regional bloc in 2018-2019. This forecast for regional blocs examines the growth rates of different regional blocs defined by the similarity of the performance of their ad markets as well as their geographical proximity. This captures the behaviour of different regional ad markets more effectively than looking at regions defined purely by geography, such as Western Europe, Central & Eastern Europe and Asia Pacific.

Fig: Growth in adspend by regional bloc 2018-2019 (%)

Source: Zenith

Fast-track Asia is characterised by economies that are growing extremely rapidly as they adopt existing technology and practices and innovate new ones, while benefiting from the rapid inflow of funds from investors hoping to tap into this growth. Fast-track Asia has enjoyed high single-digit or double-digit growth since 1996, and barely noticed the 2009 downturn. Growth is slowing now that some of the region’s markets, notably China, have achieved substantial scale, but the agency still expect growth to rise to an average of 6.2% a year to 2021. This is less rapid than the growth in Eastern Europe & Central Asia, but Fast-track Asia is ten times larger, so contributes a lot more to global adspend growth in dollar terms.

Fig: Average annual growth in adspend by regional bloc 2018-2021 (%)

Source: Zenith

The US will be the leading contributor of new ad dollars to the global market over the next three years, making up in scale what it lacks in speed. China will come second, combining large scale and rapid growth (though its growth is slowing as its scale increases).

Between 2018 and 2021 Zenith forecasts global advertising expenditure to increase by US$75bn in total. The US will contribute 29% of this extra ad expenditure and China will contribute 19%, followed by India (6%) and Indonesia (4%).

Six of the ten largest contributors will be Rising Markets* (China, India, Indonesia, Brazil, South Korea and Russia), and between them they will contribute 37% of new adspend over the next three years. Overall, Zenith forecast’s Rising Markets to contribute 54% of additional ad expenditure between 2018 and 2021, and to increase their share of the global market from 38% to 40%.

Fig: Top ten contributors to adspend growth 2018-2021 (US$m)

Source: Zenith

The world’s top seven advertising markets by size will remain stable between 2018 and 2021. In 2021, India will enter the top ten in eighth place, moving France and Australia down one place each and pushing Indonesia out of the top ten.

Fig: Share of global adspend by medium (%)

Source: Zenith

Over the last ten years internet advertising has risen from 12% of total global spend (in 2008) to 41% (in 2018). Meanwhile newspapers’ share of global spend has fallen from 25% to 8%, while magazines’ has fallen from 12% to 5%. Wherein newspapers and magazines will shrink at average rates of 4% and 6% a year respectively, ending with respective 7% and 3% market shares in 2021. And there wil be marginal increase in OOH share ranging from 6.4 tp 6.7 between 2018-2021 contributing 2526 US $ million to the over all pie.
Fig: Contribution to global growth in adspend by medium 2018-2021 (US$ million)