OOH to outperform traditional media: Magna Report
By M4G Bureau - June 24, 2019
Latest MAGNA report forecasts advertising revenues to grow for the tenth consecutive year in 2019 to reach $600bn
In its latest report on global advertising market trends, MAGNA predicts that advertising revenues will grow by +5% in 2019 to approach $600 billion. Also, MAGNA increases its forecast for 2019 growth, from +4.7% in December 2018 to +5.0% following the stronger-than-expected advertising activity in the first half of 2019 in several key markets, including US and China.
Linear advertising sales will shrink by -3% while digital ad sales will grow by +14% and in the US, digital growth has started to slow down in the first months of 2019, having reached a 52% market share at the end of last year.
As expected, global market growth is slowing down compared to the record growth recorded in 2018 (+8%), mostly due to the lack of major cyclical events (US elections, FIFA World Cup) in 2019. Neutralizing cyclical events in both years, global growth would be +7% last year and +6% this year. The lack of major cyclical events will affect editorial media types (TV, print, radio, out-of-home, digital display, banners and video) that traditionally benefit the most from those. Editorial ad revenues will stagnate at $366bn this year, while direct digital ad sales, including search and social formats, will grow by +15%.
Ad spend will grow in all key markets this year: US +3% (excluding cyclical: +5%), China +10%, Russia +10%, India +15%, UK +7%). Television ad revenues will shrink by -2% this year while print ad sales will decline by -10% and radio by -1%. OOH will continue to outperform traditional media: +5%. Social media will be the fastest-growing digital format in 2019 (+23%) ahead of video (+22%), and search (+13%).
Global advertising spend has now been growing for ten consecutive years (2010-2019) and MAGNA forecasts more growth in 2020 (linear -0.6%, digital +11%, total +5.4%). In the US, advertising sales will grow by +3% this year to reach an all-time high of $220 billion.
According to Vincent Létang, EVP, Global Market Intelligence at MAGNA, and author of the report, “Global ad spend continues to grow as the economy remains strong in key markets but two factors are slowing down the growth rates in 2019: one is cyclical (the lack of major events in 2019, following a record year in 2018) while the other is structural: digital ad formats maturing (from +19% in 2018 to +14% this year) as they now account for more than half to total advertising sales. However product innovation (smart homes, cloud services, OTT, 5G) and marketing innovation (direct-to-consumer brands) will continue to drive ad spend growth this year and next.”