Ad Spend June 2018 1 2 3 4 5 Our latest global ad spend forecasts point to a modest recovery, withgrowth accelerating from 3.3% in 2017 to 3.9% in 2018—amountingto a global spend of $613.5 billion.We’ve upgraded our mid-year growth forecast for 2018 from 3.6% to3.9%, refecting a more positive outlook globally. Contribution to newglobal ad dollars in 2018 is driven in particular by the United Statesand China, accounting for around one third and one quarter of newgrowth, respectively.Global ad spend is forecast to grow at 3.8% in 2019—an outlookconsistent with 2018’s performance, despite the lack of signifcantsporting and political events to drive growth. Digital continues to drive growth and is forecast to increase by12.6%–over three times the rate of all media in 2018. Video growthon mobile-frst social platforms will be the biggest driver for digitalwith Video (24.6%), Mobile (23.3%) and Social Media (21.6%) allseeing the highest increases in 2018. Digital overtakes TV for the frst time this year and will account for38.4% of total ad spend vs. 35.5% for TV, as the shift towards onlinevideo, subscriber video-on-demand and catch-up services continues. 10 ad spend take-aways2.Ad Spend June 2018 10 ad spend take-aways6 7 8 9 10 Paid Search’s share of global spend is projected to overtake Print(Newspaper and Magazine) spend for the frst time in 2018. Mobile ad spend is forecast to represent a quarter of global ad spend(25.2%) in 2018, exceeding the previous prediction of 24.8%. Television ad spend is forecast to return to modest growth of 1.2% in2018, following a decline in spend of -0.7% in 2017. Growth will bedriven primarily by sporting and political events (e.g. FIFA World Cup,US mid-term elections). Television ad spend is forecast to continueon a positive growth trajectory (1.1% in 2019), driven by new techdevelopments such as Addressable TV and Connected TV. Programmatic ad spend is expected to grow by 23.2% in 2018 and19.1% in 2019 as the ability to consolidate programmatic buyingstrategies across formats and devices continues to be an opportunityfor advertisers to reach the most valuable audiences at scale. Traditional media spend is forecast to decline in 2018 by -0.5% andby -0.4% in 2019.Print spend continues to decline in 2018 and 2019,but the rates of decline will not be as high as in recent years.Allother media types are expected to show moderate growth driven bytechnological innovations e.g. Digital Out-Of-Home, Digital Radioand Digital Cinema. 3. Ad Spend June 2018 Market outlook Figures in brackets show our previous forecasts from Jan 2018 Global 3.3 (3.1)3.9 (3.6)3.8 North America 2.5 (2.5)3.4 (3.1)3.2 United States2.6 (2.6)3.4 (3.2)3.1 Canada 0.0 (0.0)2.3 (1.1)5.1 Western Europe 3.2 (3.3)2.9 (2.6) 2.9 United Kingdom 4.2 (3.6)4.2 (3.8) 4.7 Germany 2.3 (2.2)2.6 (2.6) 2.9 France 2.7 (1.7)2.5 (2.0) 2.8 Italy 0.9 (0.9)1.4 (1.9)1.1 Spain2.3 (1.9)1.5 (1.4)1.2 C&EE 8.8 (8.3)7.8 (7.4) 6.6 Russia 14.3 (12.9)11.7 (10.4)8.5 Asia-Pacifc 4.0 (3.5)4.5 (4.2) 4.4 Australia 2.3 (2.7)2.8 (2.9) 2.4 China 6.3 (6.0)6.5 (5.4)6.0 India 8.9 (9.6)10.5 (12.5)11.1 Japan1.6 (1.0)1.5 (1.6)1.2 Latin America 8.3 (8.1)6.9 (8.8) 7.3 Brazil 2.8 (2.1)2.3 (5.0)2.6 2017a2018f2019f In the context of synchronised economic growth across the US, Europe and Asia, theDentsu Aegis Ad Spend Forecasts for June 2018 point to a more positive outlooktoday than at the beginning of the year. While we forecast 2018 global ad spendgrowth of 3.6% in January, the upward revision to 3.9% represents a modest butpositive source of optimism. As Figure 1 shows, upward revisions have been seenin most key markets, with emerging economies such as India continuing to realisestellar rates of growth. Given their size, the majority of new growth is contributed byChina and the United States. Figure 1: Growth in global ad spend 2017-19 (y-o-y % growth at current prices) A modest economic recovery 4. Ad Spend June 2018 China: BAT to the futureChina’s advertising market is predicted to grow in 2018 at a rate of 6.5%, up fromthe previous forecast of 5.4%, to reach RMB 630 billion—16.2% of global adinvestment. Growth will be driven by Digital spend, which is forecast to command60% of advertising spend and increase by 14.8% in 2018. The online giants Baidu,Alibaba and Tencent (BAT) are projected to contribute c.80% of this growth,underlining their dominance of the marketplace. The China ad market is forecast togrow by 6.0% in 2019 driven by a 12.5% growth in Digital spend, with E-commercespend forecast to make up 40.5% of total digital spend in 2019. Mobile paymentsare also one to watch in the coming years as platforms such as WeChat or Alipaymake cash obsolete in large parts of the country.United States: TV timesUS advertising spend is forecast to show continued growth in 2018, increasing by3.4% to reach US$217.3 billion. The Winter Olympics brought in around US$1.6billion of advertising spend. And although overall viewership was down, NBC hada dominant presence, bringing in 82% of the primetime viewers. Local TV is wherepoliticians look to spend, with TV reaching 90% of the US population. It is predictedthat more than US$2.8 billion will be spent on the upcoming mid-term elections. US ad expenditure forecasts for 2018 have been revised up from the 3.2% predictedin the January 2018 report following improved digital growth projections—revisedup from 12.8% to 13.5%. Mobile ad spend is forecast to grow by 21.2% in 2018,revised up from 20.2%, with the majority of spend (80%) going towards in-appadvertising. Thanks to a forecast of continued economic growth, the US ad marketis expected to grow by a further 3.1% in 2019.5. 。。。。。。