The 2020 Tokyo Olympics and Paralympics, UEFA European Football Championships and the US Presidential elections will drive global growth in ad spend at 3.9% in 2020, amounting to US$615.4 billion, up from 2.6% in 2019.
In Asia Pacific, which continues to be the fastest-growing economic region in the world, the continent’s two largest markets will be on very different growth paths in 2020.
This is according to Dentsu Aegis Network’s latest advertising spend forecasts, based on data from 59 markets, which has revised its 2020 growth forecast for APAC down by 0.7% to 4.2%.
DAN forecasts that India will experience double-digit growth of 10.9% in 2020 and 12% in 2021 because of the increase in smartphone adoption. In contrast, growth in China will slow to 5.6%, revised down from 6.9%, with continued slowdown into 2021.
In South East Asia, the Philippines (+4.7%) and Malaysia (+0.7%) experienced more growth than originally predicted. Malaysia has performed strongly, with a positive economic outlook creating a spending appetite for advertisers.
Meanwhile, growth projections for Indonesia, Vietnam, Singapore and Thailand have been scaled back.
Caution also continues in North Asia as South Korea has halved its growth projections from June 2019 to 2.3%, while Hong Kong’s growth has stalled after a difficult year in 2019, down 10.9%.
Digital’s share of total ad spend in APAC will exceed 51%, led by China (67.7%), Hong Kong (60.1%), Australia (55.8%) and New Zealand (54.7%). APAC remains OOH biggest market and will continue to grow in 2020 by 2%, with digital OOH the main source of this growth.
Digital is also forecast to grow 10.5% in 2020, reaching US$276bn and 45.7% of global spend. Growth will remain strong into 2021, putting digital’s share of ad spend at nearly 50%.
Within digital, mobile and video are fuelling growth, as both are forecast double-digit growth in 2020 at 16.5% and 14.6% respectively.
Traditional formats like TV and radio are showing signs of recovery globally in 2020, with voice assistants, addressable TV and programmatic ads driving spend.
TV is predicted to maintain around 31.5% of global ad spend share, growing at 0.6% in 2020 and radio is forecast to grow at 1.7%.
“APAC continues to lead the digitalisation of the Global economy, and we are seeing a surge of users in markets introducing new Digital innovations which leapfrog development in the West,” said Ashish Bhasin, the chief executive for APAC at DAN.
“China is the largest smartphone market in the world, with India overtaking the US in 2018 to be the second – the merging of mobile with traditional formats will continue to be an opportunity for growth in this region as markets mature. Global marketeers should look to APAC for developments in tech and mobile to discover opportunities to innovate their consumer offering and create long-term retention and value.”
Elsewhere around the world, Germany (-1.5%), Italy (-0.1%) and Spain (-1.3%) will see declining spend. The forecasted decline in Germany, Italy and Spain is linked to ongoing political uncertainty and weakened economic forecasts in these markets.
Latin American spend is also growing rapidly driven by digital spend as in Argentina, growth is forecast at 16% for 2020.
Peter Huijboom, global chief executive of media at DAN added: “There is a lot to look forward to in 2020. Our forecasts point to a boost in ad spend as we enter a year of important political and sporting events including Tokyo Olympics and Paralympics, UEFA European Football Championships and the US Presidential elections. Looking at local trends the picture is more mixed with some key markets slowing down while emerging economies are powering up.
“Across the media landscape we are seeing continued transformation - in digital, in mobile and across traditional formats like radio and TV where digital is now having an energising effect. Marketers in 2020 need to manage these contrasting dynamics; long and short term, global and local, digital and traditional. Ultimately, they need to remain focused on longterm sustainable growth by winning, keeping and growing their best customers.”