Advertising spend growth likely to slow

0 Comment(s)Print E-mail SHINE, January 16, 2019
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Global advertising growth is estimated at 3.8 percent in 2019, with a total value of US$625 billion, amid a relatively benign economic environment and broad-based recovery, according to Dentsu Aegis Network's latest advertising spend forecast. 

Advertising spend growth in China for 2019 is projected to be 7 percent, lower than the 7.8 percent a year ago, and will hit a total of 717 billion yuan (US$105.4 billion), fuelled by the continued expansion of domestic consumption. 

However, growth is expected to be further dampened in 2020 at an estimated 6.4 percent due to economic uncertainty. 

The pace of ad spend growth for the global market is also decelerating from that of the 4.1 percent seen in 2018, but it's set to rebound to 4.3 percent in 2020. 

Last year, pharmaceuticals were the top industry in terms of ad spend in China with over 125 billion yuan of total expenditure, while entertainment and Internet services are the fastest-growing sectors, climbing 59 and 53 percent respectively. 

The real estate sector posted the biggest drop, 35 percent, due to purchase restrictions. 

As many as 32 out of the 59 markets included in the forecast are set to report slower growth this year compared to a year ago.  

In China, mobile is forecast to account for more than three-quarters of 2019's digital ad spending for the first time. Globally, digital still remains the dominant force in ad spending and is forecast to grow beyond 40 percent for the first time in 2019.

"China's digital economy continues to lead the global market, both in terms of scale and advancement," commented Susana Tsui, Group CEO of Dentsu Aegis Network China. 

Online video is forecast to grow by one-fifth of total ad dollars globally in 2019, and it's the fastest growing category within digital ad spending, thanks to viewing habits on mobile devices and the popularity of streaming services.

"Digital connectivity, driven by advances in technology and consumers' fast adoption, has fundamentally changed the shape of the advertising business and will continue to do so," added Global CEO & Chairman of Dentsu Aegis Network Tim Andree. 

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