McKinsey & Company predicts global spending on television advertising to rise — growing at a projected 5 percent compound annual growth rate over the next five years — from $183.5B in 2014 to $233.9B in 2019.
The company doesn’t measure radio specifically, though it does have an audio entertainment category, which is projected to grow at an estimated 1.8% compound annual growth rate over the next five years — from $95.6B in 2014 to $104.6B worldwide in 2019.
Overall, the global ad spend could rise at a compound annual rate of more than 5% over the next five years — to $2.1 trillion in 2019, from $1.6 trillion in 2014.
However this growth reflects a general slowdown, according to McKinsey & Company.
Altthough total expenditures on media rose by 5.4 percent in 2014, compared with 5.2 percent in 2013, the increase in both years was lower than the 6.2 percent compound annual rate recorded between 2009 and 2012.
The company expects digital advertising, video games, and broadband will continue to be the fastest-growing segments over the next five years, with projected compound annual increases of 12.7 percent, 8.1 percent, and 7.8 percent, respectively, to 2019. While today’s stronger segments will continue to be strong over the next five years, they will probably grow more slowly.
The shift to digital, meaning Internet and mobile ads, is one of two main drivers the company sees, believing by 2019, digital will account for more than 50% of the overall total for media. “Consumer spending on digital video will overtake spending on physical media, two years earlier than we had previously forecast. Digital, consisting of Internet and mobile ads, will become the largest advertising category by 2017, surpassing TV one year earlier than forecast,” says McKinsey.
Developing markets are another driver in the growth of spending on global media. Traditional media remain strong in these regions and the markets — from Mexico and China to India and Malaysia — anticipate economic expansion and higher household incomes — particularly in the Asia–Pacific region and in Central and Eastern Europe. In fact, the Asia–Pacific media market will be the largest source of absolute growth for the global industry during the next five years, predicts McKinsey.