Marketers to Boost Global Ad Spending This Year to $540 Billion

Marketers are expected to spend $540 billion globally on advertising this year, a 4.6% increase over 2014, according to a report by media-agency Carat. The year-over-year increase comes despite a relative lack of tent-pole media events. In 2014, by comparison, a trifecta of major events -- Winter Olympics, FIFA World Cup and U.S. mid-term elections -- helped boost advertising outlays. "Carat's latest advertising forecast gives us increased optimism for the outlook for global advertising spending," Jerry Buhlmann, CEO of Carat's parent company Dentsu Aegis Network, said in a statement. "With harder times behind us, negative growth markets are pleasingly now a minority, and collectively we can look ahead to 2016 with positive growth predicted for all key markets." Global ad spending is expected to climb 5% year-over-year in 2016, according to the report. (See chart for growth rates by region and country.) The heady optimism is thanks to digital media, which is fueling the growth in advertising budgets this year, the Carat report found. Global digital spending is forecasted to grow 15.7% in 2015 compared with the previous year. Meanwhile, traditional media -- even TV -- is seeing sluggish growth or declines. The report -- which includes data from 59 markets across the Americas, Asia Pacific, Europe, Africa and the Middle East -- illustrates how media consumption is shifting through the lens of marketing budgets. Digital media, particularly mobile and video, are commanding larger investments; TV remains massive, although it's not quite as large as it once was; and print's erosion continues to the point that out-of-home ads (such as billboards) will overtake the amount advertisers spend on magazines globally. (See chart for media segment growth rates.) Spending on digital media will make up 24% of global advertising expenditures, the report predicted. That's still about 20 percentage points shy of TV, which will attract 42% of ad spending in 2015. And although newspapers' share of ad budgets is shrinking, they're still the third largest marketing expenditure. Magazines, however, will fall behind outdoor media by 2016, the report said. (See chart for share of global ad spending by media.) So what's driving the surge in digital? The report points to a 50% increase in global mobile-ad spending and a 22% boost in global online video budgets as the primary reasons. It also highlighted the emerging gulf between the amount of time spent consuming media on mobile usage and ad spending on such devices. The report said a factor holding back mobile investment is the difficulty in proving the ROI for more traditional businesses. "Much of the early investment in mobile advertising has been amongst pure-play, app economy brands and business for whom there is an easily demonstrable ROI for investing in mobile," the report said. In the U.S., the tactic of buying digital display ads using automated technology -- commonly referred to as "programmatic" -- will claim $10 billion in marketing budgets this year, a 137% year-over-year increase, according to the report. It will account for 45% of the U.S. digital display ad market. Overall U.S. ad spending is expected to climb 4.6% in 2015 compared with the previous year. What's happening in the U.S. largely reflects the rest of the globe. Digital platforms are driving the gains, but TV still holds the largest share of ad budgets despite smaller year-over-year gains.

Marketers to Boost Global Ad Spending This Year to $540 Billion

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