Dentsu Aegis forecasts better ad spend outlook; Asia-Pacific spend to hit US$8.1 billion increase

Dentsu Aegis Network’s latest Ad Spend Forecasts, based on data received from 59 markets, puts global growth at 3.6% in 2018, up from 3.1% in 2017.

Asia Pacific ad spend growth is forecast to accelerate to +4.2% in 2018, up from +3.5% in 2017.

The region is forecast to be the leading contributor to global ad spend growth in 2018, contributing 39.7%, US$8.1 billion of the total US$20.3 billion incremental global increase, led by markets China, Japan, India and the Philippines (see table below).
Events will play an important role in 2018, Winter Olympics,
Commonwealth Games, Asian games and state elections are all expected to
stimulate ad spend growth. However, a slowing of growth in markets like
Australia and China can be attributed to multiple contributing factors
such as a naturally maturing market, ad fraud and data accuracy issues
on top of a general economic slowdown.

Within this context, digital media channels continue to disrupt ad spend in 2018:

  • Digital
    media channels will continue to power ad spend growth, growing globally
    by 12.6% in 2018, versus 15% in 2017, to reach US$220.3 billion
  • Mobile
    will go from strength to strength, reaching US$121.1 billion having
    overtaken desktop as a share of total digital spend in 2017. Desktop
    will continue to lose global share (-1.5% since 2016), versus mobile’s
    gains (8.2% since 2016)
  • Digital overtakes TV, by a margin now
    exceeding previous forecasts. Digital ad spend will account for 38.3%
    share of total ad spend, TV 35.5%
  • Paid search accounts for the
    lion’s share (40%) of digital ad spend, with voice-activated devices
    helping to power its growth. Amazon’s Alexa app was the top app for
    Android and iPhone on Christmas Day 2017, with the company claiming its
    devices enjoyed the best holiday season yet
  • Video (24.5%) and
    social (23.5%) will also drive growth within digital ad spend, powered
    by smartphone take-up and mobile-video in particular
  • Programmatic spend will rise by 23% as established players and startups compete over ad tech

Jerry Buhlmann, CEO of Dentsu Aegis Network: “The latest ad spend
forecasts show a market in transformation, but not recession. The
challenge for brands is to navigate an uneven economic outlook alongside
a rapidly evolving tech and innovation landscape. In many markets,
disruptive innovation – from mobile, voice activation and new ad tech
players – is still providing new sources of growth and we forecast this
trend will continue into 2018.

“Succeeding in this environment
requires global consistency through appropriate platforms and systems,
while also the flexibility and agility to work with a wider ecosystem of
tech-enabled solutions. It demands a relentless focus on understanding
the consumer, using data to reach real people, driving relevance,
addressability and business growth.

Says Nick Waters, CEO of
Dentsu Aegis Network Asia Pacific: “Asia Pacific continues to lead the
growth in digital ad spend. With the region’s fast adoption of
technology and innovation, there will be a substantial shift towards
mobile and smart devices. As a result, mobile online video ads will be
the main drivers of growth within digital ad spend across the region.

continues to be central to our business in Asia Pacific and with better
understanding of new technologies, structures and models for business
growth, agencies must help brands move from being disrupted to

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