GroupM reduces 2014 ad spend forecast

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GroupMEconomic gridlock in the U.S. and a persistent financial crisis in the Eurozone have led GroupM to revise its worldwide ad spend forecast for 2014 downward to 4.6% growth from the 5.1% hike predicted earlier this year. The change was made in GroupM’s report, “This Year, Next Year,” which also predicted that 2013 worldwide ad spend in measured media will hit $508 billion, a 3.3% increase over 2012 spending of $492 billion.


The 74-country forecast predicted that global ad spend in 2014 will increase 4.6% compared to 2013, representing $531 billion.

For the US, the report said advertising investment in measured media grew 1.8% in 2013 to $156.3 billion, up from $153.5 billion the previous year. For 2014, the revised forecast predicted a 2.9% increase to $161 billion.

“Ad spending in 2014 will enjoy a slight bump thanks to the Winter Olympics in Sochi, with spending coming mostly from existing budgets,” said GroupM Chief Investment Officer Rino Scanzoni.  “But overall we estimate only marginal U.S. growth on a comparable component basis.”

China remains the largest single source of ad spending growth, accounting for 37% of new dollars in 2013 and a projected 31% in 2014.

The report also indicated that ad spending in the UK is strong and is predicted to grow 7% in 2013 and 6% in 2014.  The UK is the world’s fourth-largest ad market (after the U.S., China and Japan) and the third-largest contributor to ad growth in 2013 and 2014.

However, even with robust ad spending in the UK, Western Europe remains in ad recession with a projected 1% decrease in spending expected in 2013.

The report predicted that investment in digital media would account for 19% of measured ad spending globally this year ($97 billion) and 21% in 2014 ($110 billion), with respective growth rates of 15% and 14%.  Those figures are comparable to the GroupM forecast made earlier this year.

Media USD m, current prices

2012

2013f

2014f

NORTH AMERICA

166,208

169,246

174,023

yoy %

3.4

1.8

2.8

Within which USA

153,463

156,251

160,787

yoy %

3.4

1.8

2.9

LATIN AMERICA

30,817

32,742

35,803

yoy %

7.6

6.2

9.3

WESTERN EUROPE

103,648

102,729

104,659

yoy %

-4.0

-0.9

1.9

CENTRAL & EASTERN EUROPE

18,697

19,892

21,422

yoy %

6.3

6.4

7.7

ASIA-PACIFIC (all)

154,517

164,401

175,681

yoy %

7.6

6.4

6.9

NORTH ASIA

81,324

87,831

96,550

yoy %

10.7

8.0

9.9

ASEAN

11,834

12,790

13,584

yoy %

10.9

8.1

6.2

MIDDLE EAST & AFRICA

17,942

18,839

19,809

yoy %

12.6

5.0

5.1

WORLD

491,828

507,850

531,397

yoy %

3.7

3.3

4.6

 

Media yoy% adjusted for CPI
 

2012

2013f

2014f

NORTH AMERICA

1.4

0.4

1.3

Within which USA

1.3

0.4

1.4

LATIN AMERICA

1.8

2.1

4.6

WESTERN EUROPE

-6.0

-2.4

0.2

CENTRAL & EASTERN EUROPE

-0.3

-0.8

2.9

ASIA-PACIFIC (all)

5.3

4.0

3.1

NORTH ASIA

7.8

5.3

6.8

ASEAN

5.7

3.2

0.9

MIDDLE EAST & AFRICA

5.1

-1.1

-0.5

WORLD

1.0

1.0

1.8



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Carl has been with RBR-TVBR since 1997 and is currently Managing Director/Senior Editor. Residing in Northern Virginia, he covers the business of broadcasting, advertising, programming, new media and engineering. He’s also done a great deal of interviews for the company and handles our ever-growing stable of bylined columnists.