Global Ad Growth to Slow This Year, TV Sales to Drop for First Time Since 2009

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Digital media has surpassed linear TV to become the No.1 ad revenue category, says prognosticator Magna.

Advertising prognosticator Magna, the media buying arm of Interpublic Group, on Wednesday forecast that global net advertising sales would grow by 3.7 percent to $505 billion this year.

In December, it had projected worldwide ad growth of 3.6 percent in 2017. This year's predicted gain will mark "a noticeable drop compared to 2016, which reached a record 5.9 percent growth rate," Magna said. "The lack of cyclical events in 2017 (global sports events or U.S. elections), and the U.S. market itself, are...contributing the bulk of the global slowdown."

Excluding these cyclical events, ad growth this year will decline to 4.7 percent from 4.9 percent in 2016, Magna projects.

Television ad sales will be down, namely 1 percent to $180 billion, for the first time since 2009, according to Magna's forecast. In the U.S., national TV ad revenue is projected to decline 3 percent to $43 billion this year.

Digital media has now surpassed linear TV to become the No.1 ad revenue category and will grow 14 percent in 2017 to $204 billion. "Within digital, the majority of advertising sales (54 percent) is now generated by impressions and clicks on mobile devices," the firm said. "Video and social formats will continue to drive digital advertising growth (30 percent or more) while paid search will grow double digit again (13 percent) to remain the #1 format."MAGNA forecasts media owners’ net advertising sales to grow by +3.7% to $505 billion

U.S. advertising sales will grow 1.6 percent this year to $185 billion, in line with previous expectations, following a record 7.7 percent gain last year, Magna predicted. "The lack of global sports events and elections in an odd-numbered year is responsible for most of the slowdown," it said. "Excluding those cyclical events, 2017 growth would be a robust 3.4 percent, compared to a six-year-high 5.9 percent last year."

 

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