Three new ad spending forecasts released Sunday night are pegging ad growth next year partly on the Winter Olympics, the World Cup and the mid-term elections in the U.S., but forecasters continued to regard Western Europe with caution.
WPP's GroupM revised its worldwide advertising spending forecast for 2014 downward to 4.6% from 5.1%, its prediction earlier this year, citing "economic gridlock in the U.S. and a persistent financial crisis in the Eurozone." The media agency network is now forecasting an increase in global spending from $508 billion in 2013 to $531 billion in 2014.
In Western Europe, the group is projecting a 1% decrease in spending in 2013 and, tentatively, an end to declines next year. "We predict Western Europe advertising will return to modest 2% growth in 2014, but this depends on stability being restored to the troubled Eurozone periphery," the GroupM report said.
There's hope, agreed Publicis Groupe's ZenithOptimedia. While ad spending in troubled Portugal, Ireland, Italy, Greece and Spain fell by 11.1% in 2013, 2014 "looks better," the agency's forecast said. Ad spending in those countries will slip 0.9% in 2014, followed by a slow recovery of 1.8% growth in 2015 and 2.5% growth in 2016, ZenithOptimedia predicted.
Global spending will rise 3.6% in 2013 when the year as done and 5.3% in 2014, the agency said, a slight upward projection from its last forecast in September.
"Growth in global ad spend next year will come from the continued steady improvement in Europe and the three 'semi-quadrennial' events: the Winter Olympics, the football World Cup, and the mid-term elections in the US," ZenithOptimedia said in its forecast. "This assumes that the Eurozone's gradual recovery continues and no new crisis occurs."
Magna Global, part of Interpublic Group of Cos.' Mediabrands, also boosted its projections from its last forecast in June. Media owners will see global revenue growth of 3.2% in 2013, for a total of $489.6 billion, and 6.5% in 2014, the agency group said in its forecast.
GroupM's prediction that the U.S. will see a 2.9% increase in ad spend to $161 billion in 2014 is on par with its last forecast in August. This year, measured media spending in the U.S. looks set to grow a measly 1.8%, to $156.3 billion, up from $153.5 billion the previous year.
North America was the only region where Magna Global reduced its 2014 ad spend forecast, but it didn't cut the projection back by much, predicting 5.5% growth next year, versus its 5.6% prediction in June. 2013 is coming in flat, by Magna Global's measure.
ZenithOptimedia, for its part, is forecasting less growth but a "strong" 2014. Ad spending in North America will have increased 3.3% this year once the calendar turns, and will rise 4.6% in 2014.
Positive international growth
China remains the globe's largest single source of ad spending growth, accounting for 37% of new dollars in 2013 and a projected 31% in 2014, according to GroupM.
And despite Western Europe's woes, ad spending in the U.K. is "strong" and is predicted to grow 7% in 2013 and 6% in 2014, added the GroupM forecast.
Investment in digital media should account for 19% of measured ad spending globally this year ($97 billion) and 21% in 2014 ($110 billion), according to GroupM.
"Mobile is now the main driver of global ad spend growth," ZenithOptimedia said. "This the first time in the past 20 years that a new platform is expanding overall media consumption without cannibalizing any of the other media platforms."
Mobile will contribute 36% of all the extra ad spend between 2013 and 2016, ZenithOptimedia predicted. TV will be the second largest contributor, accounting for 34% of new ad expenditures, followed by desktop internet at 25%, "which continues to enjoy significant growth alongside that of mobile advertising," the group said.