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Global adspend to hit $600bn this year says IPG’s Magna

There may be a trade war between the US and China and the prospect of a shooting one in the Gulf but advertising – as a whole – seems to motor along.

Interpublic’s Magna is forecasting that global ad revenue will increase for the tenth consecutive year in 2019, up five per cent to reach a dizzy $600bn. Driven, as you might expect, by digital (up 14 per cent) although Magna says digital ad growth slowed in the US in the first months of 2019 having reached a 52 per cent share last year.

Linear (traditional) ad sales based on editorial content are forecast to drop three per cent, partly caused by a lack of big sporting and other events.

Magna EVP Vincent Létang says: “Global ad spend continues to grow as the economy remains strong in key markets but two factors are slowing down the growth rates in 2019: one is cyclical (the lack of major events in 2019, following a record year in 2018) while the other is structural: digital ad formats maturing (from +19 per cent in 2018 to +14 per cent this year) as they now account for more than half of total advertising sales.

“However product innovation (smart homes, cloud services, OTT, 5G) and marketing innovation (direct-to-consumer brands) will continue to drive ad spend growth this year and next.”

Globally the fastest-growing markets will be Argentina and the Ukraine (both +22 per cent) where ad spend is driven by hyper-inflation. Many other emerging markets will grow around double-digits or more: India (+15 per cent), Egypt (+19 per cent), Vietnam (+11 per cent) and Brazil (plus nine per cent).

For the UK Magna forecasts media owner ad revenues to grow by 6.7 per cent in 2019, to £21.8bn. Growth will slow down post-Brexit (if it happens) (2020 +5.3 per cent).

The UK remains the fourth largest ad market in the world (behind the US, China and Japan), and the largest in Europe (ahead of Germany). The UK market will remain more dynamic than the rest of Western Europe (2019 average +3.9 per cent.)

In 2019, digital ad sales will slow down but still grow in double digits (+11 per cent), while linear ad sales will erode (-1.5 per cent) for the fourth consecutive year: TV flat, radio up 2.5 per cent, print down ten per cent, Out of Home up four per cent).

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