China still growing fast, despite recent economic difficulties
Despite fears in many countries of continued or renewed economic slowdowns, the advertising industry is expected to continue growing spending at healthy rates for the next several years, driven especially by increased investments in emerging markets.
eMarketer estimates total media ad spending worldwide rose 5.4% this year to just under $519 billion—an uptick in the growth rate since 2011’s increase of 3.6%. Ad spending will continue to climb at a similar pace throughout eMarketer’s forecast period, which extends through 2016. By that year, eMarketer forecasts, worldwide ad spending will top $628 billion.
The fastest growth during the forecast period will come from Latin America, where ad spending is up 11% this year to $34.66 billion. By 2016, ad spending in Latin America will reach $51.33 billion. Asia-Pacific, Eastern Europe and the Middle East and Africa will also enjoy higher-than-average growth rates, while growth in North America and Western Europe will be significantly slower. This year, Western Europe has struggled to grow ad spending at all, with several major countries posting spending declines.
eMarketer forms its forecasts of worldwide ad spending through a bottom-up approach, based on a country- and region-level meta-analysis of various elements related to the ad spending market, including macro-level economic conditions, historical trends of the advertising market, estimates from other research firms, and consumer media consumption trends.
In the US, the world’s biggest ad market by far, spending is estimated to rise 4.9% this year to $166 billion. That level of growth will moderate over the next several years, eMarketer predicts, and 2016 spending levels will near $190 billion. Most other research firms predict slower ad spending growth in the US, but this is typically predicated on a larger dollar amount of spending. While eMarketer’s growth projection is relatively bullish, the forecast of absolute spending is comparatively conservative.
The No. 2 country in the world in terms of ad spending is Japan, though China is set to surpass it in 2014. China, the third-largest ad market in the world, is growing ad spending much more quickly than mature markets like the US or Japan.
eMarketer estimates ad spending in China is up 13% this year, slightly higher than Warc’s November 2012 projection of 11.5% growth. Research firms that predicted significantly higher growth rates tended to make those forecasts earlier in 2012, when overall economic prognostications for China were more favorable. Still, eMarketer predicts double-digit ad spend growth rates in this massive country through the rest of the forecast period, which will help boost Asia-Pacific—and worldwide—increases.
The biggest ad spender in Europe, and the fourth-largest in the world, Germany will post near-flat growth of 1.5% this year, with spending reaching $27.7 billion. eMarketer expects this sluggish growth to continue in Germany throughout the forecast period. Ad spending growth in the UK is somewhat better, and closer in line with US rates. eMarketer estimates spending will reach $24 billion by the end of the year.
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