The global economy faces clear challenges – such as the ongoing slowdown in China, and recession in Brazil and Russia; the humanitarian disaster originating in Syria; and uncertainty over the future of the European Union, notably continuing fragility in Greece and the possible departure of the UK. Despite all that, advertisers’ confidence remained largely unshaken and ZO’s forecasts for global growth in 2016 have barely changed since the last report in December. ZO highlights 3 main reasons to be optimistic about the prospects for global adspend growth: special events this year, rapid recovery from the markets most affected by the eurozone crisis, and the emergence of rapidly growing markets that are now opening up to international advertising.
2016 is a quadrennial year, when ad expenditure is boosted by the US presidential elections, the Summer Olympics and the UEFA football championship in Europe. ZO expects these events to add a net US$6.1bn to the global ad market in 2016 (US$3.2bn from the elections, US$2.0bn from the Olympics and US$0.9bn from the football). The quadrennial will therefore add 1.1 percentage points to this year’s growth rate for global advertising expenditure, which would otherwise be 3.5%.
In the medium term, most of the European ad markets that suffered the deepest cuts from the financial crisis and its aftermath are now enjoying sustained recovery and will expand rapidly over the next few years. Ad spend in Ireland, Portugal and Spain fell by a total 45% between 2007 and 2013. Adspend in these markets recovered by 8.9% in 2014, however, and 7.3% in 2015, and ZO forecasts an average growth of 6.7% a year to 2018. Other European markets that fell sharply during the crisis but are now growing at a rapid pace include Croatia (forecast to grow by 6.1% a year to 2018), Denmark (7.3%), Hungary (5.2%) and Romania (6.3%). Even Greece is expected to enjoy annual growth of 3.9%. These markets have room to growth rapidly for several years to come: after all, they have a lot of ground to make up.
An extensive excerpt of ZenithOptimedia’s report is available here.
ZenithOptimedia’s Advertising Expenditure Forecasts report – published quarterly – contains forecasts of advertising expenditure by medium for 80 countries. It has been published continually since 1987, and is used by agencies, media owners, banks, analysts, consultants, academics and governments around the world.