Global Ad Spending Will Be Up an Average 4.2% Next Year
Global ad spending will be up an average 4.2% next year and the average ad-to-sales ratio (ad dollars spent as a percent of total revenue) will be an estimated 2.0%, according to the 39th annual "Advertising Ratios and Budgets" report, released June 10 by research company Schonfeld & Associates.
The report forecasts ad spending and ad-to-sales ratios for more than 5,000 individual companies in over 320 industry segments.
"It's fairly modest growth," said Carol Greenhut, president of Schonfeld & Associates and author of the report. "We're seeing a little more growth every year, and we are returning to spending levels seen before the recession. The industry is shifting from traditional media to internet spending. There's a lot of spending going on, but not in the same places."
Schonfeld gathers spending data from publicly-reported information and analyzes it using a proprietary forecasting model. The report includes information on total advertising and promotional spending, not just measured media.
The top category next year will be the automotive industry, which will spend over $44.0 billion in advertising, up 2.8% over this year's estimated spending, the report found. Top brands including Chrysler, Daimler, Ford, General Motors, Honda, Nissan, Toyota and Volkswagen will spend more than $2 billion each on advertising in 2016.
The second-largest ad spending category next year will be large diversified food companies, which will spend an estimated $30.7 billion on ads, up slightly from $30.4 billion this year.
The No. 3 category next year will be the wireless communications industry, which will spend an estimated $23.0 billion on ads, up 2.0% over this year.
The pharmaceutical industry -- historically one of the top-spending categories -- will decrease ad spending by 1.7% next year to $21.0 billion, the report found.
The industry spending the most on advertising as a percentage of total sales will be consumer products, which will have an estimated ad-to-sales revenue of 6.5% next year.
Next is communications products and services, which will have an estimated ad-to-sales ratio of 3.2%.
No. 3 is a tie between computers/software and health care, each of which will have an estimated ad-to-sales ratio of 3.0%.