Photo: ITU
Updating its ad investment forecasts for the current and next year, GroupM, the media investment group of WPP, sees a growth of 3.1% in 2017 and 4.3% in 2018 representing an jump of $23B .
Major media will compete for their share of local and global markets.
According to the forecast, updated last week, television investment will grow 0.4% in 2017 and 2.2% in 2018 globally.
However, TV will lose one share point this year and another next.
On the other hand, digital investment growth is expected at 11.5% in 2017 and 11.3% next year.
The new estimates say that the digital investment’s share will increase from 34.1% this year to 36.4% in 2018.
Excluding China, digital’s growth is moderated a bit: 10.6% (2017) and 10.5% (2018).
GroupM believes digital investment will exceed traditional TV in seventeen markets by year’s end: Australia, Canada, Denmark, China, Finland, France, Hong Kong, Ireland, Hungary, Germany, The Netherlands, New Zealand, Norway, Sweden, Switzerland, Taiwan, and the U.K. On analysis of real investment dollar trends, GroupM disagrees that digital has already surpassed TV in the U.S. (per other industry sources); these lines are expected to cross in 2020.
Tech giants Google and Facebook will continue their domination of the digital ad revenues.
Google reported ad revenues of $24B and Facebook reported $10B at the at close of the third quarter,
Based on its study of total worldwide digital investment and prior disclosures from these companies, GroupM believes these two companies will account for 84% of all digital investment in 2017 (ex-China).
Google and Facebook will account for 186% of digital growth in 2017.
“This is exceedingly bad news for the balance of the digital publisher ecosystem.”
Retail gian Amazon is on a fast-track to figure more prominently in the consolidation of digital ad investment with a few dominant players. Conservatively, GroupM believes the sum of Amazon’s on-platform search and display advertising combined with their off-platform advertising revenues is in the low single-digit billions, GroupM says.
Among the factors contributing to GroupM’s positive 2018 outlook are global GDP growth with rising consumer demand, fixed investment, industrial production and exports.
The GroupM also identifies some risks that include weak investment and productivity, as well as the “specter of excessive debt, which may deter policymakers from raising interest rates.”
The report also predicts six countries as driving 68% of incremental investment in 2018: U.S., China, Argentina, Japan, India, and the United Kingdom.
