dentsu aegis network


Ad Spend Report 2018

18 jun 2018

Brazil ad spend maintains moderate growth in 2018                marked by the political events and the World Cup                                                 

  • Political uncertainty around the election race and the new presidency will impact on consumption and ad spend
  • Globally, Dentsu Aegis Network expects Digital to overtake TV for the first time. However, Brazil’s digital rise is lagging far behind other major markets.
  • Public Administration shows the largest growth and retail companies lead national spend

 14 June 2018.  Leading advertising and digital communications group Dentsu Aegis Network today released its biannual forecasts, pointing to a more positive 2018 for global advertising expenditure than previously expected. Ad-spend growth will rise from 3.3% in 2017 to hit 3.9% in 2018 - higher than the 3.6% forecast in January 2019 and taking total investment to US$613.5bn. Global events such as the Winter Olympics & Paralympics, the FIFA World Cup in Russia and US mid-term elections will play an important role in stimulating growth.

Geographically, Asia Pacific and North America are the major growth regions, contributing 41% and 32% of the global increase respectively.  Western Europe accounts for 13% with Latin America at 8% and Eastern Europe 5%.

Advertising expenditure in Brazil keeps healthy growth rhythm with +2.3% and +2.6% forecast for 2018 and 2019. The Football World Cup will have a positive impact on Ad Spend in Brazil thanks to increase of sponsorship of the games and brands talking about Brazilian football team while the Presidential Election will have the opposite effect as many advertisers don’t want their brand linked with political discussions. The new presidency and concerns around the economic context will probably have an impact on consumption and so on ad spend. After August, when officially starts the Presidential Race, there will be a decrease of investments.

Due to the election period, 2018 will be a year with big investments on Public Administration category, with is forecasted to have the biggest increment of spend. It is also expected that Consumer Services have an increase of investments.

Commenting on the latest forecasts, Jerry Buhlmann, CEO of Dentsu Aegis Network, said:      

“In the context of synchronised economic growth across the US, Europe and Asia, these figures point to a more positive outlook today than at the beginning of the year and represent a modest but encouraging source of optimism. We are seeing upward revisions in most key markets, with emerging economies such as India showing high rates of growth. The US economy is growing strongly as economic stimulation and tax cuts filter through. Spend in China continues to grow at pace, though driven almost entirely by the ecommerce platforms, Alibaba, Tencent and Baidu.”

“Digital remains the dominant growth area with 25% of global advertising spend expected to be delivered through mobile for the first time. Digital is now the leading form of advertising in 21 out of the 59 markets we track.”

Key Global Ad Spend trends:

  • Digital advertising will grow +12.6%, having the largest share of global spend with 38.5 %. Online Video, Mobile and Social  will drive its growth up to US$230.9 billion.
  • TV advertising spend is forecast to regain strength in 2018 by +1.2%, following a -0.7% decline in 2017, remaining a major medium in the mix with 35.5 % of overall investment.  In 2019, the TV spend will continue the positive growth trajectory. 
  • Digital to overtake TV for the first time. In 21 out of the 59 markets tracked, digital will be the leading advertising channel in 2018
  • Ad spend in online video (+24.6%) and social media (+21.6%) notably will lead most of the digital investment growth in 2018, even though paid search will continue to account for the largest share within digital with over 36 % of the overall spend.
  • Traditional media spend is forecast to decline by -0.5% and -0.4% in 2019. Newspapers and magazines continue their downward trend and will decrease by -7.5% and -6.5% respectively.
  • Growth in OOH (+2.2%) is driven by Digital OOH.
  • Radio (+2%) and Cinema (+5.9%) spend are expected to show some growth over this year.

Global media trends

Mobile on the go

The mobile device is steadily becoming our primary point of access to all digital services and content.  In 2018, 52.2% of all worldwide online traffic was generated through mobile phones, up from 50.3% in the previous year, according to Statista. People now spend an unprecedented amount of time on their smartphones—more than five hours a day, according to some estimates.  This growth in usage is largely driven by the widespread availability of high-quality digital Video. Mobile Video consumption is exploding among all age groups and content categories.  9 in 10 Social media users opt for mobile browsing, with mobile apps accounting for 70% of time spent on Social media.

Reflecting this, mobile is forecast to represent a quarter of global ad spend 25.2% this year exceeding the previous prediction of 24.8%.  With Mobile payments forecast to be more popular in the coming years, Mobile is set to continue on a positive growth trajectory a forecast 23.3% in 2018 and 18.8% in 2019.


Digital still calls the tune

Worldwide Digital media spend is forecast to increase by 12.6% in 2018, more than three times the rate of all media (3.9%), to reach US$230.6 billion—a US$25.7 billion incremental increase year-on-year. Online Video (+24.6%) and Social Media (+21.6%) are particularly strong. Paid Search continues to account for the largest share of digital (39%). As previously predicted, Digital will overtake TV for the first time this year to account for 38.4% share of total ad spend vs. 35.5%. In the US, Digital spend is forecast to overtake TV in 2019. Programmatic ad spend is expected to grow by 23.2% in 2018 and 19.1% in 2019 as the ability to consolidate programmatic buying strategies across formats and devices continues to be an opportunity for advertisers to reach the most valuable audiences at scale.