In a nutshell:
Globally, media owner advertising revenues are forecast to grow by +4.8% in 2015 to $536 billion.
The stronger economic environment expected for next year (+3.8% for real GDP compared to +3.3% in 2014) will not quite offset the negative impact caused by the absence of non-recurring drivers like Winter Olympics, FIFA World Cup or the US mid-term elections this year. We believe these events generated one extra point of advertising growth in 2014.
As predicted, Western Europe finally returned to growth this year (+3.0%) and we are expecting a similar growth in 2015 (+2.8%). Our 2015 forecast for Eastern Europe is cut significantly, from +6.4% to +3.0% to reflect the massive economic headwinds faced by Russia and Ukraine. Asia-Pacific will continue high-single-digit growth (+6.4%). Latin American advertising spend will grow by double digits (+13%) with inflation (especially in Argentina and Venezuela) remaining the main driver, amidst a sluggish economic environment.
The non-recurring sports events of 2014 contributed to the global growth of television (+5.2%). The FIFA World Cup was a clear positive in some markets like the UK and the US, but it was neutral in Germany and below expectations in Brazil. The Winter Olympics and mid-term elections bonanza proved below expectations in the US. TV is expected to grow again in 2015, globally, driven by a positive pricing trend in Europe and parts of Asia (+3.0%).
Digital media grew strongly again this year (+17.2% to $142 billion) driven by mobile campaigns (+72%) and social formats (+64%). We forecast global digital revenues to reach 30% market share globally in 2015 (+15.1% to $163 billion). Based on our long-term forecasts, digital media will catch up with television in 2019, when both account for 38% of global advertising revenues.
Digital media is already the #1 media category in 14 of the 73 markets analyzed by MAGNA GLOBAL in this update, including the UK (highest share in the world: 47%), Australia, Canada, Germany, China, Sweden and the Netherlands. In the US, digital will outgrow television revenues by 2017.
Most other media categories suffered from the competition of television and digital in 2014. Newspaper ad sales decreased by an average -4.3% while magazines ad revenues shrank by -7.3%. Radio was flat (+0.1%) and out-of-home media grew by +3.4%.
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