GroupM has upgraded its 2018 forecast, now estimating that total advertising investment will grow by 4.5% this year and by 3.9% in 2019. Its December 2017 forecast for the year ahead estimated that 2018 spending would reach $558 billion, with a year-over-year gain of 4.3%.
Net new advertising investment this year will total $24 billion -- the highest annual incremental increase since the $26 billion posted in 2010.
The WPP media unit also adjusted its estimate for 2017, now reporting that last year’s ad expenditures grew by 3.5% -- higher than the December estimate of 3.1%.
The firm’s U.S. ad growth estimate has also been upgraded a tick or two, and is now estimated at 3.7% for 2018 and 2.2% in 2019.
Global digital advertising is estimated at $198 billion for 2017, and is forecast to reach $221 billion in 2018 and $243 billion in 2019.
Digital investment grew by 15% last year -- higher than the 12% that GroupM had predicted in December. Twelve percent growth is predicted in digital for 2018 and 10% for 2019. Digital’s share for 2018 will rise to 39%, up from the 36% percent that GroupM earlier predicted. In 2019, the firm projects digital’s share to reach 42%. Digital advertising will account for 95% of net new global advertising growth in 2018 and 99% in 2019.
Excluding China, Facebook and Google captured 135% of the growth in digital advertising investment in 2017, according to GroupM’s analysis. However, it qualified that assessment, noting that the line between “digital” and “broadcast” continues to become less distinct. Ad revenue flowing into the IP-delivered services of broadcast TV brands is counted as “digital.”
“We’d like to have better intelligence on the ways investment dollars are flowing to digital,” stated Adam Smith, Futures Director. “Digital ad revenue is reported either in whole, or by type, principally display and search, but never discriminates between large and small media owners, nor the short and long tail of advertisers who buy with or without agency support. While the same concern applies to other media, digital is unique in its long tail being dominated by global vendors. Because digital is mostly walled gardens, a country is doing well if 20% of its digital ad investment is properly categorized.”
GroupM’s new forecast follows revised projections by Zenith, Dentsu Aegis and Magna Global in recent weeks.