Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Warc International Ad Forecast 2014/15
June 2014
warc.com
Adspend
Generally, data are net of discounts and include agency commission and classified advertising, but exclude
product...
Global advertising spend is expected to rise by 5.6% in 2014 in PPP terms at current prices, an upward revision of
1.2pp f...
The BRICs are set to record the biggest increases in adspend in 2014, led by India on 14.0% growth. Brazil’s
advertising m...
Adspend by Country, 2014 (f)
Year-on-Year % change, Local Currency, Current Prices
Source: Warc, International Ad Forecast...
Adspend by Country, 2014 (f)
Year-on-Year % change, Local Currency, Constant Prices
Source: Warc, International Ad Forecas...
Adspend by Country, 2015 (f)
Year-on-Year % change, Local Currency, Current Prices
Source: Warc, International Ad Forecast...
Adspend by Country, 2015 (f)
Year-on-Year % change, Local Currency, Constant Prices
Source: Warc, International Ad Forecas...
Share of Total Adspend by Country, 2014 (f)
PPPs (Current Prices)
Source: Warc, International Ad Forecast 2014/15 (June 20...
Share of Total Adspend by Country, 2014 (f)
US$ (Current Prices)
Source: Warc, International Ad Forecast 2014/15 (June 201...
Global Adspend Trends, 2014 (f)
Year-on-Year % Change, PPPs (Current Prices)
Source: Warc, International Ad Forecast 2014/...
Global Adspend Trends, 2015 (f)
Year-on-Year % Change, PPPs (Current Prices)
Source: Warc, International Ad Forecast 2014/...
Economic outlook
We expect Australian GDP to expand by 2.7% in 2014, then at a slightly increased rate of 2.9% next year. ...
10.9
11.3
12.6
13.0
11.9
13.3 13.2 13.2 13.4
13.8
14.3
0
2
4
6
8
10
12
14
16
2005 2006 2007 2008 2009 2010 2011 2012 2013 ...
warc.com
Economic outlook
Hindered by the weak performance of the industrial sector, GDP growth in Q1 grew just 0.2% at an...
15.6
16.9
18.5
21.0
21.9
27.1
30.1
32.9
36.3
40.8
44.1
0
5
10
15
20
25
30
35
40
45
2005 2006 2007 2008 2009 2010 2011 2012...
warc.com
Economic outlook
The Canadian economy experienced a poor first quarter, with recently released data from Statisti...
10.9
11.7
12.3
12.9
11.9
12.9
13.5
13.9 14.1
14.5
15.1
0
2
4
6
8
10
12
14
16
2005 2006 2007 2008 2009 2010 2011 2012 2013 ...
Economic outlook
The Chinese economy had a rocky start to the year, growing at an annual rate of just 7.4% in Q1 2014 acco...
76.5
90.2
104.4
122.3
138.6
168.7
210.5
239.3
277.7
311.9
346.2
0
50
100
150
200
250
300
350
400
2005 2006 2007 2008 2009 ...
warc.com
Economic outlook
The faltering economic recovery across the Eurozone was reflected in France’s growth figure for ...
11.7
12.5
13.3 13.2
11.5
12.2
12.7 12.9
12.6 12.6 12.7
0
2
4
6
8
10
12
14
16
2005 2006 2007 2008 2009 2010 2011 2012 2013 ...
Economic outlook
Germany’s macroeconomic conditions appear more favourable than the Eurozone’s other large nations, with a...
16.4
18.2
19.2 19.2
17.4
18.3
19.1
18.6 18.7 19.1 19.5
0
2
4
6
8
10
12
14
16
18
20
22
2005 2006 2007 2008 2009 2010 2011 2...
Economic outlook
We expect growth for the Indian economy to pick up throughout the forecast period. But the pace of growth...
99.3
119.5
143.9
167.5
186.8
217.8
247.7
261.6
286.2
326.2
370.3
0
50
100
150
200
250
300
350
400
2005 2006 2007 2008 2009...
Economic outlook
Italy's economy contracted 0.5% in Q1 2014 compared with the same period in the previous year, according ...
8.7
9.1
9.5 9.6
8.5
9.1 8.8
7.9
7.2 7.3 7.4
0
2
4
6
8
10
12
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Adspend...
Economic outlook
Warc forecasts GDP growth of 1.3% for both 2014 and 2015, with signs that the aggressive stimulus policie...
4.4 4.4 4.5
4.3
3.8 3.8 3.7
3.8 3.9 4.0 4.1
0
1
2
3
4
5
6
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Adspend 2...
Economic outlook
The recent economic sanctions imposed on Russia have dented the country’s economic prospects. GDP growth
...
Adspend 2005–2015 (current prices)
Note: Figures in brackets denote year-on-year % change.
Source: AKAR; IAB Europe; Warc,...
Economic outlook
The British economy now seems to be edging back towards pre-recession levels, and we believe GDP will ris...
14.1 14.3
15.2 14.9
13.1
14.3
14.7 15.0
15.7
16.6
17.8
0
2
4
6
8
10
12
14
16
18
20
2005 2006 2007 2008 2009 2010 2011 2012...
Economic outlook
The first quarter of 2014 brought the first economic contraction in three years, which the Commerce
Depar...
160.3
167.3 167.9
159.2
133.8
143.5
148.0
154.9 158.6
167.4
175.0
0
20
40
60
80
100
120
140
160
180
200
2005 2006 2007 200...
Upcoming SlideShare
Loading in …5
×

Warc international ad_forecast_2014-15

406 views

Published on

  • Be the first to comment

  • Be the first to like this

Warc international ad_forecast_2014-15

  1. 1. Warc International Ad Forecast 2014/15 June 2014 warc.com
  2. 2. Adspend Generally, data are net of discounts and include agency commission and classified advertising, but exclude production costs. Please refer to the associated Excel spreadsheet for full notes on each country’s data. Purchasing Power Parity PPPs measure the buying power of local currency units (e.g. US$, GB£) when spent in their domestic markets. They enable accurate international comparisons of economies and prices by removing the impact of exchange rate fluctuations. The US economy is used as the global reference point for PPPs and is set to an index score of 100. For the purpose of international comparison, we recommend using PPPs as they remove the distorting effect of exchange rate fluctuations. Access the full data on the Warc International Ad Forecast Page Notes on data warc.com
  3. 3. Global advertising spend is expected to rise by 5.6% in 2014 in PPP terms at current prices, an upward revision of 1.2pp from our October forecast. This equates to growth of 3.2% in real terms, if inflation is taken into account. It follows growth in advertising expenditure of 4.2% in 2013. We anticipate further growth of 5.3% in 2015, or 2.7% in real terms. The outlook is positive due to improving trading conditions and the stimulus provided by major sporting events this year, such as the FIFA World Cup and Sochi Winter Olympics. We expect 2014 to record the highest annual rate of growth since 2010, when the industry was bouncing back from recession. This is largely because the outlook for the global economy is now stabilising and advertisers are starting to feel confident about making additional investments. We have used PPP data for our headline figures rather than US$, because significant exchange rate fluctuations can distort the data. Summary warc.com
  4. 4. The BRICs are set to record the biggest increases in adspend in 2014, led by India on 14.0% growth. Brazil’s advertising market is expected to rise by 12.4% this year, boosted by its hosting of the world’s largest football tournament, followed by China (+12.3%) and Russia (+8.6). Looking to 2015, we expect all markets to show growth in current prices. India (+13.5%) will continue to increase advertising spend at the fastest rate. Outside the BRICs, the UK will be the strongest performer on 6.9% growth. Turning to growth by media channel (in PPP terms), internet (including mobile) will continue to gain share, with an estimated increase in advertising spend of just over 17% this year. This comes largely at the expense of print, with newspapers set to decline 6.4% and magazines by 4.3%. TV, the biggest media channel with anticipated spend of PPP159bn across the 12 featured markets this year, is expected to demonstrate growth of 4.6%. Summary warc.com
  5. 5. Adspend by Country, 2014 (f) Year-on-Year % change, Local Currency, Current Prices Source: Warc, International Ad Forecast 2014/15 (June 2014). 14.0% 12.4% 12.3% 8.6% 5.8% 5.6% 3.2% 2.9% 2.3% 2.0% 0.7% 0.2% India Brazil China Russia UK US Canada Australia Japan Germany Italy France warc.com
  6. 6. Adspend by Country, 2014 (f) Year-on-Year % change, Local Currency, Constant Prices Source: Warc, International Ad Forecast 2014/15 (June 2014). 9.5% 6.0% 5.6% 3.8% 3.8% 2.2% 2.0% 1.6% 0.3% 0.0% 0.0% -0.8% China Brazil India UK US Russia Germany Canada Australia Italy Japan France warc.com
  7. 7. Adspend by Country, 2015 (f) Year-on-Year % change, Local Currency, Current Prices Source: Warc, International Ad Forecast 2014/15 (June 2014). 13.5% 11.0% 9.2% 8.0% 6.9% 4.5% 3.9% 3.4% 2.2% 1.9% 1.2% 0.6% India China Russia Brazil UK US Canada Australia Japan Germany Italy France warc.com
  8. 8. Adspend by Country, 2015 (f) Year-on-Year % change, Local Currency, Constant Prices Source: Warc, International Ad Forecast 2014/15 (June 2014). 7.6% 6.2% 4.8% 3.3% 2.6% 2.6% 2.4% 2.0% 0.9% 0.5% 0.1% -0.6% China India UK Russia US Germany Brazil Canada Australia Japan Italy France warc.com
  9. 9. Share of Total Adspend by Country, 2014 (f) PPPs (Current Prices) Source: Warc, International Ad Forecast 2014/15 (June 2014). Australia 2.1% Brazil 4.7% Canada 2.8% China 17.4% France 3.4% Germany 5.4% India 3.3% Italy 2.0% Japan 9.4% Russia 3.4% UK 5.8% US 40.2% warc.com PPP 416.5bn
  10. 10. Share of Total Adspend by Country, 2014 (f) US$ (Current Prices) Source: Warc, International Ad Forecast 2014/15 (June 2014). Australia 3.3% Brazil 4.7% Canada 3.5% China 12.6% France 4.2% Germany 6.3% India 1.4% Italy 2.4% Japan 10.2% Russia 3.0% UK 6.5% US 41.8% warc.com $400.4bn
  11. 11. Global Adspend Trends, 2014 (f) Year-on-Year % Change, PPPs (Current Prices) Source: Warc, International Ad Forecast 2014/15 (June 2014). 17.1 4.6 4.1 3.8 1.7 -4.3 -6.4 5.6 Internet TV Cinema Out of home Radio Magazines Newspapers Total warc.com
  12. 12. Global Adspend Trends, 2015 (f) Year-on-Year % Change, PPPs (Current Prices) Source: Warc, International Ad Forecast 2014/15 (June 2014). 14.9 5.3 4.4 2.8 1.7 -2.7 -4.4 5.3 Internet Cinema Out of home TV Radio Magazines Newspapers Total warc.com
  13. 13. Economic outlook We expect Australian GDP to expand by 2.7% in 2014, then at a slightly increased rate of 2.9% next year. The economy’s shift away from the commodities sector is now strengthening. While data from the Australian Bureau of Statistics show that business investment dipped in the first quarter, investment plans were revised upwards by mining and non-mining companies alike, indicating a generally positive economic outlook. But consumer confidence has been dented by the recent budget in May, with planned tax increases having been announced by the government, but it remains to be seen whether this view is maintained long-term. We still predict increased growth in private consumption of 3.0% this year and 3.2% in 2015. Advertising outlook Total advertising spend in Australia increased by 2.0% in 2013 to reach A$13.4bn, in line with our October forecast. Internet continued to make strong gains (+19.3% year-on-year), driven by mobile advertising – spend on this channel quadrupled to reach A$349.2 – and video, which saw spend rise 72% year-on-year. Cinema (+14.5%), out of home (+8.3%) and TV (+2.7%) also increased their share of total adspend in 2013, largely at the expense of the print sector. Newspapers saw spend dip 16.8% last year, while magazines recorded a decline of 8.0%. The Australian advertising outlook is set for steady acceleration in line with economic growth, and we anticipate a rise of 2.9% this year and an increase of 3.4% in 2015. Internet will continue to rise rapidly, but the rate of growth is expected to decelerate. It should, however, be enough to ensure that internet overtakes TV as the country’s biggest adspend channel – with a share of 33.3% – later this year. By contrast, advertising revenues for newspapers and magazines are predicted to account for just 18% of total adspend by the end of 2015, just half of the share the channel took five years earlier in 2010. Australia warc.com
  14. 14. 10.9 11.3 12.6 13.0 11.9 13.3 13.2 13.2 13.4 13.8 14.3 0 2 4 6 8 10 12 14 16 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Adspend 2005–2015 (current prices) Note: Figures in brackets denote year-on-year % change. Source: CEASA; Warc, International Ad Forecast 2014/15 (June 2014). AUS $ billion Australia (+7.3%) (+4.0%) (+11.2%) (+3.4%) (-8.7%) (+11.9%) (-0.7%) (-0.3%) (+2.0%) (+2.9%) (+3.4%) warc.com
  15. 15. warc.com Economic outlook Hindered by the weak performance of the industrial sector, GDP growth in Q1 grew just 0.2% at an annualised rate. Consequently, we have lowered our expectations of economic expansion in Brazil to +1.8% for the year. There are several obstacles to future growth; Brazil’s debt to GDP ratio stands at over 60%, while the latest HSBC Purchasing Managers’ Index (PMI) reached 48.8 in May: a net decline in activity suggesting that industry will be a drag on overall growth this year. However, spending by some 3.7 million tourists during the 2014 World Cup – which is estimated at approximately 0.6% of Brazil’s nominal GDP – should help to ease the economic strain. Brazilian consumers remain gloomy, with 55% believing the World Cup will do more harm to the country than good, while one broader consumer confidence index fell to the lowest level in five years in May. Higher prices for consumer goods have contributed to negative sentiment: annual inflation stands at around 6.2%, far exceeding the official 4.5% target. Advertising outlook Advertising spend exceeded expectations in 2013, increasing 10.3% year-on-year (we had predicted growth of just 6.5% in October). Within the total, TV, radio and internet increased their share of adspend. Despite the general consumer apathy and economic slowdown, hosting the World Cup will undoubtedly boost advertising spend in 2014. We believe expenditure should rise 12.4% year-on-year, before dropping back to a more modest growth of 8.0% in 2015. TV, the country’s largest adspend medium, will extend its share to around 64% of the all-media total: approximately 26bn reals, before losing some share to internet in 2015. Internet is also taking share from traditional media, and we expect spend to amount to some 7bn reals this year. Brazil
  16. 16. 15.6 16.9 18.5 21.0 21.9 27.1 30.1 32.9 36.3 40.8 44.1 0 5 10 15 20 25 30 35 40 45 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Adspend 2005–2015 (current prices) BRL billion Brazil (+14.8%) (+8.5%) (+9.7%) (+13.3%) (+4.5%) (+23.7%) (+11.2%) (+9.3%) (+10.3%) (+12.4%) (+8.0%) warc.comNote: Figures in brackets denote year-on-year % change. Source: Projecto Inter-Meios; Warc, International Ad Forecast 2014/15 (June 2014).
  17. 17. warc.com Economic outlook The Canadian economy experienced a poor first quarter, with recently released data from Statistics Canada showing GDP growth slowed to an annualised rate of just 1.2%. Growth had previously been estimated at 1.8%. This came on the back of weakened domestic demand, which shrank for the first time since the recession in 2009. This can be partly explained by extreme winter weather, which impacted on most economic activity, from house builds and consumer spending to exports – in particular exports to the US, where the weather resulted in a Q1 2014 annualised drop in GDP. But we expect the economy to gain strength throughout the rest of the year and forecast overall (year-on-year) GDP growth of 2.3% this year and 2.6% in 2015. Advertising outlook Full year advertising spend data for Canada in 2013 are not yet available, but we estimate that total spend grew by around 0.9% last year. This is a downgrade on our previous forecast due to worse than expected performances for newspapers and TV. Internet adspend – which includes broadcaster VOD as well as digital revenues for newspapers, magazines and radio – is predicted to have risen just over 18% compared with 2012, with further double digit growth expected. Looking ahead, we expect total Canadian adspend to rise by a further 3.2% in 2014 and by 3.9% in 2015. The year started on a positive note for Canadian advertisers, with TV in particular benefitting from the Sochi Winter Olympics and recording net adspend growth in a challenging market. We expect the channel to end the year on 1.2% growth, an improvement on two years of decline. We anticipate print continuing to lose share to online throughout the forecast period, but this sector is still expected to account for just over 25% of total spend by the end of 2015. Out of home will benefit from the rise in digital and should also perform well throughout the forecast period. Canada
  18. 18. 10.9 11.7 12.3 12.9 11.9 12.9 13.5 13.9 14.1 14.5 15.1 0 2 4 6 8 10 12 14 16 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Adspend 2005–2015 (current prices) Note: Figures in brackets denote year-on-year % change. Source: TVB; Warc, International Ad Forecast 2014/15 (June 2014). C$ billion Canada (+5.4%) (+7.3%) (+5.2%) (+4.4%) (-7.5%) (+8.7%) (+4.3%) (+3.3%) (+0.9%) (+3.2%) (+3.9%) warc.com
  19. 19. Economic outlook The Chinese economy had a rocky start to the year, growing at an annual rate of just 7.4% in Q1 2014 according to the National Bureau of Statistics. This represents the slowest pace of growth in 18 months, but did exceed some consensus forecasts. This deceleration in growth can be partly attributed to weak domestic demand which is particularly offsetting gains in GDP growth. The latest HSBC/Markit PMI data for May show operating conditions among Chinese manufacturers deteriorated marginally for the fifth consecutive month, but that export orders picked up. We do not expect any significant deterioration in overall GDP growth and predict the economy will expand 7.3% this year, followed by 7.1% in 2015. Plans for restructuring the economy were launched by the government in November last year with the aim of ensuring sustained long-term expansion. Advertising outlook Preliminary estimates for advertising expenditure in 2013 (+16.0% growth from 2012) have exceeded our previous expectations following significant growth for online. Digital advertising revenues increased by 46% according to data released by iResearch, on a par with growth levels recorded in 2012 and well ahead of forecast (+23%). Chinese advertisers are shifting spend away from the more expensive traditional media amid concerns about the nation's economic prospects. The increased digital spend also reflects the increasing maturity of China’s digital market, the growth of e-commerce (online retail sales rose 52% year on year in the Jan–April period) and the rise of programmatic buying. The internet has now overtaken TV to become the biggest adspend medium. This online growth is expected to continue throughout the forecast period, although the pace of expansion will slow in line with the economy. We expect total Chinese adspend to rise by 12.3% in 2014 and by 11% next year. China warc.com
  20. 20. 76.5 90.2 104.4 122.3 138.6 168.7 210.5 239.3 277.7 311.9 346.2 0 50 100 150 200 250 300 350 400 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Adspend 2005–2015 (current prices) Note: Figures in brackets denote year-on-year % change. Source: CTR China: iResearch; Warc, International Ad Forecast 2014/15 (June 2014). RMB billion China (+19.1%) (+17.9%) (+15.7%) (+17.1%) (+13.4%) (+21.7%) (+24.8%) (+13.7%) (+16.0%) (+12.3%) (+11.0%) warc.com
  21. 21. warc.com Economic outlook The faltering economic recovery across the Eurozone was reflected in France’s growth figure for in Q1 2014, as GDP remained flat, with a scant 0.2% rise forecasted for Q2. The government has pledged to cut spending by €50bn to bring its public deficit in line with the EU-agreed target of 3% of GDP by 2015. Warc expects an annual rise in GDP of 0.8% for 2014. French consumer confidence remained at a historically low level in May, and consumer spending fell half a percent year-on-year at end-Q1. INSEE accredited the decrease in spending to the VAT rise to 20% in January. France’s unemployment rate also hit a record high – approximately 10% – in April. Industrial production remains weak: the French manufacturing PMI fell to 49.6 in May, signalling a net fall in output. Advertising outlook Advertising spend in France fell by 2.5% in 2013 according to official data from IREP. Internet was the only medium to record net growth (+4.5% year-on-year). IREP’s data for the first quarter of the year indicate that advertising spend across the major media decreased by 3.2%. The print sector witnessed steep declines, with newspapers at -9.2% year-on-year and magazines down 9.8%. In line with these latest results, and the slow economic recovery, we forecast all-media adspend to rise by only 0.2% this year, and a further 0.6% in 2015. At constant prices, however, this marks a 0.8% and 0.6% decline in advertising expenditure respectively. The TV advertising market is beginning to stabilise, yet TF1, the nation’s largest commercial broadcaster, recently reported a 0.4% slide in ad revenues. Despite the positive effect of the FIFA World Cup, we forecast TV adspend to remain flat in 2014, before seeing growth of just 0.2% next year. Internet and cinema will be the only channels to show notable growth throughout the forecast period, with the former rising 5.1% this year. France
  22. 22. 11.7 12.5 13.3 13.2 11.5 12.2 12.7 12.9 12.6 12.6 12.7 0 2 4 6 8 10 12 14 16 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Adspend 2005–2015 (current prices) Note: Figures in brackets denote year-on-year % change. Source: IREP; Warc, International Ad Forecast 2014/15 (June 2014). France € billion (+2.2%) (+6.7%) (+6.6%) (-0.7%) (-12.6%) (+6.1%) (+3.7%) (+1.6%) (-2.5%) (+0.2%) (+0.6%) warc.com
  23. 23. Economic outlook Germany’s macroeconomic conditions appear more favourable than the Eurozone’s other large nations, with a 0.8% annual GDP rise in Q1 2014 the largest seen in three years (compared with a 0.2% rise for the bloc as a whole). Warc forecasts that the country is set to meet 1.9% GDP growth in both 2014 and 2015. A Gfk survey found that consumer confidence in June was at its highest level since 2007, a good sign for the wider economy as private consumption accounts for some 57% of German GDP. Consumer spending is expected to rise by 1.5% in 2014. Latest figures show it increased 0.7% in the first quarter. Inflation also hit a four-year low in May. Advertising outlook Germany’s advertising market, reflecting the country’s economic outlook, will grow consistently over the forecast period. The country saw all-media growth of 0.7% in 2013, and we expect conditions to improve this year (+2.0%) and next (+1.9%). Unusually among mature markets, newspapers remained Germany’s largest advertising medium in 2013, taking an all-media share of 28.4%. However, in common with global trends, spending on print media is set to decline over the coming years, with newspaper adspend forecast to drop 6.0% in 2014. Consequently, internet will take the largest share of advertising expenditure for the first time this year. We expect Internet spend to total some €5.5bn in 2014, an 11.9% rise from 2013. TV (+2.9%) and out of home (+3.5%) are expected to receive boosts from the FIFA World Cup this year, with growth for each slowing into 2015. Germany warc.com
  24. 24. 16.4 18.2 19.2 19.2 17.4 18.3 19.1 18.6 18.7 19.1 19.5 0 2 4 6 8 10 12 14 16 18 20 22 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Adspend 2005–2015 (current prices) Note: Figures in brackets denote year-on-year % change. Source: ZAW; Warc, International Ad Forecast 2014/15 (June 2014). € billion Germany (+1.7%) (+11.3%) (+5.4%) (-0.2%) (-9.3%) (+5.3%) (+4.3%) (-2.6%) (+0.7%) (+2.0%) (+1.9%) warc.com
  25. 25. Economic outlook We expect growth for the Indian economy to pick up throughout the forecast period. But the pace of growth will remain some way off the rapid expansion seen in 2010, rising 5.0% this year and 6.0% in 2015. Investor confidence has received a boost from the election of Narendra Modi's Bharatiya Janata Party (BJP) in May, which ran on a platform of economic reform. But macroeconomic data for the year to date have been underwhelming, industrial output is weak and both the services and manufacturing PMIs indicate decelerating business investment. The incoming government will need to tackle the country's high inflation (8.6% in April) and infrastructure development in order to sustain economic growth. Advertising outlook According to our provisional estimates, advertising spend in India increased by 9.4% in 2013 compared with the previous year. This is slightly ahead of our October forecast of 6.5% growth. Both radio (+12.5%) and internet (+37.5%) grew at a higher rate than the all media total, and are expected to continue these strong performances into 2014. Radio spend is expected to increase by an additional 14.3% this year, following a boost from the recent elections and the medium's appeal for advertisers wanting to reach rural communities. Internet is predicted to rise in the region of 37% once again, in line with rising penetration. The channel also appeals to the more budget conscious marketer. TV, the nation's second largest medium, is also expected to lose share to internet but at a slightly lower rate. The channel is benefitting from rising digitisation which is growing inventory, while the 10+2 advertising cap should improve quality and ensure higher rates. India warc.com
  26. 26. 99.3 119.5 143.9 167.5 186.8 217.8 247.7 261.6 286.2 326.2 370.3 0 50 100 150 200 250 300 350 400 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Adspend 2005–2015 (current prices) Note: Figures in brackets denote year-on-year % change. Source: TAM India; Warc, International Ad Forecast 2014/15 (June 2014). India INR billion (+11.7%) (+20.3%) (+20.4%) (+16.4%) (+11.6%) (+16.6%) (+13.7%) (+5.6%) (+9.4%) (+14.0%) (+13.5%) warc.com
  27. 27. Economic outlook Italy's economy contracted 0.5% in Q1 2014 compared with the same period in the previous year, according to data released by Istat. This represents an improvement on the final quarter of 2014 when GDP shrank 0.9%. Italy's new Prime Minister, Matteo Renzi, is aiming to implement growth-boosting reforms, following a recession which lasted over two years. Household consumption has been particularly hard hit, due to high unemployment, which registered a rate of 12.6% in April. Recent cuts to the rate of personal income tax for low earners has boosted confidence in May, and we expect consumer spending to record a moderate increase (+0.2%) for the first time in three years in 2014. Alongside encouraging industrial production data for April (up 0.7% from March) and an anticipated rise in exports in line with an improved global economy, we anticipate GDP growth of 0.4% for Italy this year. Advertising outlook Total adspend decreased by 8.1% in Italy in 2013 according to latest full year data from Nielsen. This is higher than our October forecast which predicted a bigger drop of 12.9%, largely because both internet (+13.1%) and TV (–10.0%) performed better than initially expected. Print recorded the biggest decline once again and the sector now represents less than 20% of the total advertising market, down from 30% just five years ago. Steep declines are also forecast for the channel over next two years. We have kept our total adspend forecast for 2014 at 0.7% growth and expect a further increase of 1.2% next year. Data for the year to date are mixed and advertisers remain understandably cautious in the current economic climate. We expect the World Cup in June to provide a boost for TV and predict growth for the year of 1.1%. Internet should have another strong year with an estimated increase in spend of 12.2%. Italy warc.com
  28. 28. 8.7 9.1 9.5 9.6 8.5 9.1 8.8 7.9 7.2 7.3 7.4 0 2 4 6 8 10 12 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Adspend 2005–2015 (current prices) Note: Figures in brackets denote year-on-year % change. Source: Nielsen Italia; IAB Europe; Warc, International Ad Forecast 2014/15 (June 2014). Italy € billion (+3.0%) (+4.8%) (+5.0%) (+1.1%) (-11.9%) (+6.8%) (-2.3%) (-10.9%) (-8.1%) (+0.7%) (+1.2%) warc.com
  29. 29. Economic outlook Warc forecasts GDP growth of 1.3% for both 2014 and 2015, with signs that the aggressive stimulus policies imposed by Prime Minister Shinzo Abe are bearing fruit after years of below-par growth and deflation. The Japanese economy expanded by 5.9% at an annualised rate during Q1 2014, due largely to increased consumer spending ahead of the sales tax rise to 8% on April 1st. A second rise – to 10% – is scheduled for October 2015. Private consumption accounts for around 60% of the country’s GDP. After years of deflation, we forecast Japan’s consumer prices index to grow 2.3% in 2014, ahead of the central bank’s target rate of +2.0%. The unemployment rate in April 2014 was an impressive 3.6% – close to a seven year low. However, while there were some 108 jobs for every 100 people seeking employment, the workforce is becoming increasingly transient: part-time employment was up 5% against the previous fiscal quarter at end-March 2014, with full-time employment down 0.7%. Advertising Outlook Data for the first four months of 2014 from Dentsu, the ad agency network, suggest that Japan’s advertising market is maintaining the strong recovery shown in H2 2013 which ultimately led to annual growth of 2.2%. We anticipate similar all-media increases of 2.3% this year and 2.2% in 2015. TV, Japan’s largest ad medium by far, is forecast to increase by 2.0% this year, more than cancelling out the predicted declines for print and radio. Internet should also show solid growth, for the first time overtaking the print sector in terms of overall share. Internet is forecast to rise 7.5% this year and 7.0% in 2015, when total digital expenditure will surpass ¥800m. Japan warc.com
  30. 30. 4.4 4.4 4.5 4.3 3.8 3.8 3.7 3.8 3.9 4.0 4.1 0 1 2 3 4 5 6 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Adspend 2005–2015 (current prices) Note: Figures in brackets denote year-on-year % change. Source: Dentsu; Warc, International Ad Forecast 2014/15 (June 2014). Japan ¥ trillion (+7.6%) (+1.0%) (+0.6%) (-4.6%) (-11.8%) (+0.0%) (-1.8%) (+3.3%) (+2.2%) (+2.3%) (+2.2%) warc.com
  31. 31. Economic outlook The recent economic sanctions imposed on Russia have dented the country’s economic prospects. GDP growth slowed to an annualised rate of +0.9% in Q1 2014, with Russian Prime Minister Dmitry Medvedev indicating that he expected economic expansion to drop to around +0.1% in Q2. However, there are several catalysts for growth, including a US$400bn gas deal with China, and, more generally, the strength of Russia’s energy and natural resources sectors, as oil accounts for 74% of Russia’s exports. Meanwhile, the creation of a new Eurasian Economic Union with Belarus and Kazakhstan could also boost the economy. Warc expects GDP to grow 1.0% in 2014, followed by a 2.0% rise in 2015. The Russian consumer prices index is forecast to reach 6.3% this year, far higher than the bank’s target of 5%, thus increasing the burden on shoppers. Advertising outlook This economic slowdown will inevitably impact on Russia’s advertising sector over the forecast period. However, Sochi’s hosting of the Winter Olympics in 2014, along with Russia’s participation in the FIFA World Cup finals, should boost growth. All things considered, we forecast a rise of 8.6% this year, followed by additional growth of 9.2% in 2015. Internet is the boom medium for adspend in Russia, however the nation’s growth rate is slowing as the digital market matures. After digital spend rose 27.0% in 2013, we expect to see further growth of 21.8% this year, and 22.2% in 2015, by which time expenditure will have surpassed RUB100bn. As with all other media, TV’s share is decreasing as a result of the digital rise, however the medium will preserve the lion’s share of the market, accounting for some 48% (RUB186bn) in 2014. Russia warc.com
  32. 32. Adspend 2005–2015 (current prices) Note: Figures in brackets denote year-on-year % change. Source: AKAR; IAB Europe; Warc, International Ad Forecast 2014/15 (June 2014). (+14.8%) (+9.7%) (+13.3%) (+4.5%) (+23.7%) (+11.2%) Russia 143.7 185.2 241.1 284.2 205.8 239.5 289.7 325.4 357.1 387.8 423.5 0 50 100 150 200 250 300 350 400 450 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 RUB billion (+34.4%) (+28.9%) (+30.2%) (+17.9%) (-27.6%) (+16.4%) (+21.0%) (+12.3%) (+9.8%) (+8.6%) (+9.2%) warc.com
  33. 33. Economic outlook The British economy now seems to be edging back towards pre-recession levels, and we believe GDP will rise 2.9% this year, slowing to 2.1% growth in 2015. UK inflation fell 0.1pp to 1.6% in March, aligning with real wages for the first time in six years. Consumer spending in Q1 2014 was up 0.8% against the previous quarter, while business investment grew 2.7% by the same measure at that time. The employment rate returned to its long-term average in June for the first time in over five years, with unemployment at 6.6%, a five-year low. Advertising outlook According to latest data published by the AA/Warc Expenditure Report, UK adspend performed steadily in 2013, rising by 4.3% to £15.7bn. Internet was the key driver of growth (+15.6%), while TV (+2.9%) and out of home (+2.0%) also posted increases. We expect total UK adspend to increase 5.8% in 2014 and a further 6.9% next year. While 2015 will see GDP growth slow, we believe some advertisers will remain cautious with marketing budget allocation this year, preferring to wait until the economic recovery proves sound. Mobile adspend accounted for in excess of £1bn of total Internet revenue in 2013, following a year-on-year rise of 95%. We expect this rapid growth to continue throughout the forecast period, boosting internet spend by 12.4% this year and by 12.2% in 2015. TV is expected to make decent gains over the forecast period as well, recording growth of 5.6% and 6.0% for 2014 and 2015 respectively. United Kingdom warc.com
  34. 34. 14.1 14.3 15.2 14.9 13.1 14.3 14.7 15.0 15.7 16.6 17.8 0 2 4 6 8 10 12 14 16 18 20 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Adspend 2005–2015 (current prices) Note: Figures in brackets denote year-on-year % change. Source: AA/Warc Expenditure Report; Warc, International Ad Forecast 2014/15 (June 2014). United Kingdom £ billion (+3.7%) (+1.5%) (+6.3%) (-2.2%) (-11.7%) (+9.0%) (+3.1%) (+2.2%) (+4.3%) (+5.8%) (+6.9%) warc.com
  35. 35. Economic outlook The first quarter of 2014 brought the first economic contraction in three years, which the Commerce Department accredited to bad weather and reduced additions to inventories by businesses. This contraction is being viewed as an anomaly, and we expect economic growth of 2.6% in 2014 and 3.0% in 2015. US consumer confidence is relatively low, underpinned by bleak prospects for wage growth, which for nearly half of all households means anticipated declines in inflation-adjusted incomes during the year ahead. We also expect inflation to be 0.2pp higher than previously forecast, at +1.7% this year. The rate of employment is at its most robust since 1999, with The Bureau of Labor Statistics reporting that all nine million jobs lost during the recession have now been recovered, although the number of full-time jobs remains lower. However, the unemployment rate remains at 6.3%. Advertising outlook Total US adspend expanded at a slightly greater rate than anticipated in 2013, rising 2.7% to $159bn. Looking ahead, Warc forecasts growth in adspend of 5.6% this year, stimulated by a number of events, such as the Sochi Winter Olympics, the FIFA World Cup, and political spending in the run-up to national mid-term elections. This is slightly ahead of our previous forecast. After an estimated fall in expenditure of just under 1.0% in 2013, TV is expected to bounce back this year as it benefits from the sporting and political events. We expect a rise of 5.7% in 2014, slowing to 2.3% next year. Internet is set to make strong gains relative to other media, at +15.6% in 2014 and +13.9% in 2015, when spend will total some $56bn. Out of home (+4.5%) and cinema (+4.5%) will also see growth in adspend this year, while newspapers (-7.4%) and magazines (-4.0%) will continue to demonstrate declines. USA warc.com
  36. 36. 160.3 167.3 167.9 159.2 133.8 143.5 148.0 154.9 158.6 167.4 175.0 0 20 40 60 80 100 120 140 160 180 200 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Adspend 2005–2015 (current prices) Note: Figures in brackets denote year-on-year % change. Source: MagnaGlobal; Warc, International Ad Forecast 2014/15 (June 2014). USA $ billion (+4.3%) (+4.4%) (+0.3%) (-5.2%) (-16.0%) (+7.3%) (+3.1%) (+4.7%) (+2.4%) (+5.6%) (+4.5%) warc.com

×