Special Issue: OOH Trends Around the World
by COMMB Staff AOÛT 19 2018Aug 19 2018
In its latest report on global advertising market trends released in June, MAGNA forecasts media owners’ net advertising revenues (NAR) to grow by +6.4 percent to $551 billion in 2018 in the 70 countries analyzed by MAGNA.
Highlights from the report include:
- MAGNA increases its forecast for 2018 following strong market performance in the first few months e.g. +8% in the US in the first quarter, and +31% for Google and Facebook, globally.
- The 2018 growth (+6.4%) is an acceleration from 2017 (+4.5%), mostly due to the five billion dollars of incremental ad spend generated around cyclical events in 2018 (US Mid-Term elections, FIFA Football World Cup, Winter Olympics). Neutralizing cyclical revenues, the 2018 growth would be +5.5%, in line with 2017.
- Global ad spend remains strong thanks to robust economies (US +6.4%, China +10%, Russia +12%, India +12.5%) and recovering economies (Latin America +10%, Middle East +9%). Western Europe lags behind due to low economic growth and political uncertainty (+4.1%).
- Digital advertising sales will grow by +15.6% in 2018 to reach $250 billion or 45% of global advertising revenues. Mobile ad sales reached half of total digital spend last year, and will increase to 62% of total digital spend this year. Digital will represent half of the world’s total advertising sales by 2020.
- In the US, advertising sales will grow by +6.4% in 2018 to reach an all-time high of $207 billion, including $4 billion dollars of incremental revenues from cyclical events. Excluding cyclical revenues, underlying growth this year will be 4.7% (similar to 2017).
- US digital ad sales will grow by +15% this year to pass $100 billion (52% of total ad sales). Non-digital ad sales will shrink by -4.6%. National TV ad revenues will be flat; local TV will grow by +10%, OOH by +2%; print ad sales will decrease by -17% and linear radio by nearly -4%
- Next year (2019) will see a slower growth in the US at +2% in the absence of cyclical drivers, although core growth will also slow (+3.6%).
MAGNA reports OOH will be the only traditional media category to show growth in 2018. Global OOH is forecast to grow by +3.4 percent to $33.5 billion. OOH does benefit from cyclical events but the main driver remains the rollout of digital OOH inventory. DOOH will grow by +16 percent this year to reach $5.7 billion as new airports, malls and transit systems become available for media buying this year. Prime examples cited by MAGNA include an upgrade and expansion of the DOOH system in the London underground, and thousands of screens being rolled out in the New York subway.
“Global Advertising Spending is going to expand by the strongest growth rate since 2010 this year, as several of the largest markets – including the US, Russia and China – experience robust economic growth. Many consumer packaged goods and automotive brands are freezing or cutting ad expenditure, which hurts the revenues of traditional media types, while digital media, used by millions of small and local advertisers, seems to be immune from slow-down so far. Linear television will enjoy modest growth in most markets however, as cyclical events bring incremental budgets and strong pricing (CPM infla-tion), offsetting shrinking volume (ratings decline).”
- Vincent Létang, EVP, Global Market Intelligence at MAGNA
US Top Ad Market
eMarketer projects North America will remain the top advertising market in 2018 with a 37.0% share of worldwide total media.
Global Ad Revenue by Media Channel 2014 – 2022
Global digital OOH (including cinema) has grown from 18.7 percent of total OOH in 2014 to 23.6 percent in 2017, and is projected to increase to 32.8 percent in 2022 or $12 billion. MAGNA estimated US digital OOH and cinema to be $1.77 billion in 2017 or 23.1 percent of total US OOH.
The US consumer spends twice as much time with OOH than the global average.
Zenith reports global consumers spend about 1.3 hours daily with OOH (including cinema), where the USA Touchpoints/Reali-tyMine “OOH and Today’s Mobile Consumer” study found US consumers ages 18- 64 spend on average 2.8 hours in the OOH environment.
Top OOH Countries by Revenue
The US remains the top OOH country in revenue, and ranks 10th among the ten largest OOH revenue countries in media share. Population density plays a significant role in determining OOH share of the total media universe.
The World’s Largest Advertisers
The World’s 100 largest advertisers increased ad spending 3.4 percent to $267 billion in 2016. The largest growth occurred in China, which boasts four of the world’s biggest marketers. Advertising and promotional spending by Alibaba, China’s biggest online retailer, rocketed 50 percent to $1.3 billion, the fastest growth in the top 100.
Asia is home to 23 of the world’s 100 biggest advertisers. Those Asian marketers in 2016 spent $49 billion on worldwide advertising and accounted for 18 percent of the top 100’s worldwide spending.
Auto was the biggest category among the world’s aargest advertisers, with 17 marketers spending $51 billion. Personal care and household products was close behind with 13 marketers spending $48 billion. The top 100 includes 46 based in North America (45 in the U.S. plus the telecom firm América Móvil in Mexico), 31 in Europe and 23 in Asia.
Digital, Mobile Consumers Shift Global Ad Spend
In just one decade, smartphones have dramatically changed consumer behavior, and as a result major shifts in ad spend have followed. Mobile ad spend is the largest segment of global digital ad spend.
Privacy: US consumers rank average in receptivity to data sharing benefits.
When asked about willingness to share personal data, such as financial and driving records, for benefits like lower cost and personalization, al-most 40 percent of Chinese consumers were very receptive. A quarter of US consumers were very receptive, which was just below the global average of 27 percent.
