Big brand budgets and quadrennial events such as the Olympics, European Football Championship and US presidential election will drive 2016’s global advertising revenue growth to $532 billion.
The advertising industry is about to turn the corner thanks to the global economy getting back on track, according to a new report released by IHS Markit.
Advertising revenue will grow 7.1% in 2016 to $532 billion. Strong growth in global real private consumption also buoyed advertising revenue as brands tried to take advantage of heightened consumer spending. Advertising revenue accounted for 0.69% of global GDP in 2016, up from 0.66% in 2015, the report said.
Top 10 markets
The top 10 markets make 75% of the global revenue figure. The top 10 markets still account for the lion’s share of global advertising revenue. However, their collective power has dropped due slowdowns in the Chinese and Brazilian economies, which were the rising stars in the top 10 in 2015.
The top 10 accounted for 76% of global ad revenue in 2015; it dropped to 75% in 2016.
Four out of the five fastest growing countries in 2016 were in Africa. Ghana and Kenya have been high on the list of many media companies’ expansion plans, and we are seeing growth above 20%. These markets are still growing from a low base, but the sheer size of their populations means they are becoming interesting targets for big brands.
TV remains number one, but online will overtake by 2020
TV was the number one medium globally for advertising revenue, accounting for $192 billion, or 36%, of global revenue. Despite the incredible growth of online giants like Facebook, Google and Snapchat, the TV market continues to benefit from big brand budgets. Quadrennial events such as the Olympics, the European Football Championship and the US elections helped keep TV on top.
However, revenue from online advertising will overtake TV within the next five years. In some countries such as the UK, online already accounts for almost 50% of total advertising revenue and will only keep getting stronger.