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Advertising Zenith

Brexit vote fails to halt global ad market growth

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By John McCarthy, Opinion Editor

September 12, 2016 | 4 min read

Global ad spend is projected to grow by 4.4 per cent in 2016 with Zenith’s new ‘Advertising Expenditure Forecasts’ claiming the Brexit has had a minimal impact on the industry.

Brexit

Middle East and North Africa experiences the largest slump

Following the EU referendum in June, which saw the UK marginally vote to depart the European Union, UK ad spend was largely paused as marketers analysed its effect on the international markets.

Ultimately, the panic largely subsided and ad spend almost returned to previous levels, with the report marginally downgrading the growth forecast by 0.2 per cent to 5.4 per cent.

In July, the drop in the value of the pound was silver-lined with the news that smaller and independent agencies could better compete in Europe, operating as a cheaper alternative to agencies on the continent.

The report said: “Although the vote for ‘Brexit’ in the UK’s EU referendum came as a shock to many in the market, so far advertisers have reacted calmly, with no widespread budget reductions,” it did however report that the market will grow only by half of 2015’s 9.2 expansion.

This year, the global ad market will grow a reported $539bn, it is projected to increase to by 4.5 per cent in 2017 and 4.6 per cent in 2018.

The US, the Philippines and Western Europe were credited as the drivers of this faster adspend growth. Mobile will usurp desktop even faster than previously predicted too, with its global growth reaccessed from 46 per cent to 48 per cent - as a result mobile adspend will exceed desktop by $8bn in 2017.

On the projections for mobile, Paul Carolan, chief commercial officer at mobile advertising technology company Widespace, said: “We have seen more excitement around the use of mobile advertising which goes in line with Zenith’s forecast of mobile spend growing astronomically in the next three years. The forecast of 48 percent growth this year and 33 percent next year shows that advertisers are finally embracing the always-on mobile consumer. However, advertisers need to up their game when it comes to utilising this medium – chasing clicks isn’t the way forward. Advertisers will keep investing in the channel and reap the benefits if they make sure that the user experience isn’t disrupted and if they accept that it is a useful branding channel like more traditional mediums, such as TV.”

Claudia Collu, chief commercial officer at advertising technology company MainAd jumped into the effects of the Brexit: "It is interesting to see actual figures being put against the likely effects of Brexit on the advertising industry. The report talks about long term effects due to the political situation, however it still forecasts a steady overall growth of 5.4 percent in Europe this year. Let’s face it, it will take a lot for London to cease being the European, if not global hub, for a large part of the advertising industry. The report also outlines an initial drop of desktop spending which shouldn't come as a surprise either as mobile advertising is finally finding its feet. 2016 could finally be the year of mobile after all!"

And Matt Byrne, UK director, FastPay disussed the implications for adtech vendors: “The forecast shows the enduring strength of the UK ad market despite recent political turmoil. This resilience and continued, if slowing, growth is especially important for the smaller businesses and start-ups that are powering this digital adspend boom,” he concluded “What’s essential is that that the revenues from this digital growth work their way down the chain of clients and agencies to both ad tech vendors and publishers.”

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