GroupM: 'China and India to drive global ad spend growth in 2017'
China and other “new world” countries will continue to over-contribute to the global growth of the advertising industry in 2017, albeit with “a new normal more modest level of growth”, according to GroupM which further noted that digital will continue to spur growth in APAC markets.
Global advertising spend is forecast to hit $547bn a year global in 2017
The US and China will account for half of all net growth in ad spend throughout 2017 when global ad budgets will swell to hit $547bn, with China taking a narrow lead over the US in terms of propelling this growth, with China and Japan still among the world’s top five media markets in terms of ad spend.
Additionally, India remains, by far, the fastest growing market in the world's $10bn-plus ad markets, with growth is forecast at 13.8% in 2016, although this will slow to 12.5% in 2017.
With late-year growth, GroupM China revised its 2016 ad spend forecast to grow 7.8%, up from 6.6% predicted earlier, although China no longer boasts recent double-digit rates, according to GroupM. Although it did note continuing urbanization and solid consumer confidence lend ample support for continued growth. GroupM also forecast that digital advertising in China will grow 29.5% in 2016, although this growth will also slow to 21.5% growth in 2017.
Adam Smith, futures director at GroupM, described GroupM China’s forecasted increase in spending numbers as “more of a relief”, especially since a little over a year ago there was widespread anxiety over a “hard landing” – where economies transition from high growth more sluggish performance in a short period of time – adding that this was a “vote of comfort in the government’s credibility”.
A further breakdown of GroupM’s China numbers, claimed that FMCG advertising rose 4.6% in the second quarter year-on-year, much faster than the 2% growth it had earlier forecast.
Elsewhere in APAC, Smith noted how “there’s a problem in Singapore", adding that "no one is measuring the internet there,” adding that it usually denotes the lack of an IAB measurement in place there.
“They used to get numbers, but now they’ve stopped. People forget that Google and Facebook are a big chunk of those markets, and both of them don’t report on country spending,” he said, adding that both companies only report what they are bound to under regulatory guidelines.
This also means that Facebook and Google only have to break out spending numbers in countries that contribute to more than 10% or more of global sales. “So Google and Facebook report one global figure, and Google reports the UK, but that’s about it,” said Smith, adding that Google’s complicated tax structure makes assessment of specific market-spend difficult further still.