Magna Global (IPG Mediabrands) forecasts global advertising revenues to grow by +4.8% to $536 billion in 2015


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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