• by Steve McClellan  @mp_mcclellan, May 31, 2016

Expenditure on luxury advertising will rise by 3.0% in 2016, up from 1.9% in 2015, according to a new forecast from Publicis Groupe’s Zenith.

The agency said that the acceleration will be driven by recovery in Asia and Eastern Europe after a tough year in 2015.

Luxury advertisers will spend a total of $10.9 billion across the top 18 markets in 2016, up from $10.6 billion in 2015.

The luxury ad market slowed from 2.9% growth in 2014 to 1.9% growth in 2015 as advertisers reacted to slowdown in the BRIC markets as well as to local conflicts and terrorism. Ad spend shrank by 1.4% in Asia and by a massive 20.3% in Eastern Europe (mainly the result of the oil crisis and rouble devaluation in Russia), but the global total was buoyed by strong growth in North America (3.6%) and Western Europe (4.7%).   

Zenith predicts that Asia will return to 2.9% growth in 2016, while the decline in Eastern Europe slows to 2.8%. North America will remain relatively strong, with 3.9% growth, but Western Europe will slip back to 1.7%.

Luxury advertising is growing less rapidly than advertising as a whole and the agency believes this underperformance to continue, with luxury advertising growing 3.0% in 2016 compared to 4.5% growth across all categories. The U.S. and China are driving growth in luxury advertising. Between 2015 and 2017, the Zenith forecast calls for luxury advertising to grow by $705 million. 82% of this growth will come from the U.S. ($347 million) and China ($228 million).