TV, OOH, print and radio all underperform in Group M worldwide media forecast
Group M’s worldwide media forecast, This Year, Next Year, predicts that the advertising industry will grow for the rest of this year and into 2020 across more than 60 markets, but notes that Australia’s growth forecast has contracted in response to economic uncertainty.
The report cites the federal election, the decline of housing prices, and the banking Royal Commission as reasons for lowered consumer confidence in the local market.
“While the economic foundations supporting the advertising industry are somewhat fragile at this time, growth trends are holding up for now,” said Brian Wieser, global president of business intelligence at Group M.
Australian trends
While the market did well in the first half of 2018, up 7.2%, the second half of the year saw growth drop to 3.6%. And 2019 hasn’t delivered great results so far, which Group M says is “not helped by the hard comparable of the 2018 Winter Olympics”.
Automotive, the largest category, is set to decrease, with new car sales declining in the economic climate. The category saw a 21% drop in ad spending in April, according to SMI. Retail is similarly affected.
Group M said the Tokyo Olympics will reinvigorate the market next year, but the forecast has still contracted.
Out of home is one of the biggest growth channels locally, with 10.8% growth in 2018, and digital representing 51% of OOH bookings.
The report notes that podcasts, social content, and new talent should inject some growth into the radio market, and digital news increased 8.7% year on year in 2018. Group M predicts that this growth will continue, driven by premium content, subscriptions, and “internal restructures”.
Global trends
Globally, Group M forecasts 3.4% growth in 2019 or 4.6% on an underlying basis (excluding political advertising in the US), and 4.7% growth in 2020, on an underlying basis.
The US is key to the industry’s growth, along with China, Brazil, India and the UK (these markets account for more than half of growth in 2019 and 2020), and digital advertising continues to be the largest growth medium across markets. China represents one sixth of global advertising, with a forecasted 5.6% growth in 2020, while India expects double-digit growth in both years (14% in 2019 and 13% in 2020), which would see it surpass Australia and Canada to become the eighth largest ad market.
Brazil expects a decline of 0.9% this year, but a turnaround in 2020 with 6.1% growth. And the UK, the fourth largest ad market, should see 6.1% growth in 2019 and 4.6% in 2020 (despite ongoing uncertainty with Brexit).
Even digital is slowing down
Internet-related activity looks to capture 50% of global ad spend in 2020, doubling its 2014 share. However, despite this dominance, the Group M report warns of plateauing spending and deceleration with each year.
TV should account for 30% of 2020’s advertising, but growth has flattened, and is set to fall 3% this year and rise 1.5% next. Group M attributes this to US activity, which makes up 36% of global TV advertising.
Unsurprisingly, newspapers are due to decline in both years, by 9.3% this year and 5.8% next year, totalling US$38bn in ad revenue. Newspapers represent 6% of worldwide ad spend, compared to its 34% share in 1999 and 2000.
Group M says TV, OOH, print, and radio are all underperforming.
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