NEWS5 December 2016

Global ad expenditure to reach $547bn in 2017

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US – WPP’s media network GroupM has predicted a 4.4% increase in global advertising spend in 2017, taking it to $547 billion – with digital making up one third of expenditure.

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In 2016, digital accounted for 72 cents of every new ad dollar, and TV 21 cents. In 2017, digital will capture 77 cents per new dollar, TV will get 17 cents.

The US and China account for half of all net growth in the 2016 and 2017, with China taking back a narrow lead over the U.S.

Pressure on budgets remains high in a low GDP growth climate although the impact of Brexit and the US presidential election result have yet to impact ad budgets.

With late-year growth, GroupM China revised 2016 to 7.8%, up from 6.6% predicted earlier.

The US remains the other principal growth contributor and GroupM fractionally upgrades 2016 growth from 3.1% to 3.2%. This includes revising TV from 3.4% to 4.1%. This year’s less robust election spending was compensated with Summer Olympics advertising spend.

GroupM’s futures director, Adam Smith, said: “Ad growth has shadowed the global economy’s long, low and level recovery cycle since 2010. These new forecasts emphasise the ad story of our times is however structural, not cyclical.

“Twenty years on from the internet becoming a measured ad medium, digital remains the engine of advertising growth and disruptor-in-chief of the entire marketing economy.”