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ZenithOptimedia on Monday reduced its forecast for global and U.S. advertising spending for 2016, citing weaker print media trends.
U.S. ad spending will rise 3.7 percent this year, it projected, down from its December prediction for 3.9 percent growth. The media buyer mentioned that newspaper and magazine ad declines were more pronounced than it had previously expected. That will be followed by U.S. growth of 2.8 percent in 2017 and 3.1 percent in 2018, according to the forecast.
In 2015, U.S. ad spending rose 3.6 percent, with current trends “spurred by the strengthened economy,” as well as special events, Zenith said.
North America overall will see 3.6 percent growth in 2016, with an average of 3.1 percent growth a year forecast between 2015 and 2018 as “declining network television ratings erode U.S. ad spend growth,” the company predicts.
ZenithOptimedia now projects global advertising to increase 4.6 percent to $579 billion in 2016, down from 4.7 percent in its December forecast, and hit $603 billion in 2017. The projected growth is stronger than that seen in 2015 though when global ad spend rose 3.9 percent. Excluding boosts from special events, mainly the U.S. presidential elections that are expected to add about $3.2 billion in spending and the Summer Olympics’ estimated $2 billion boost, but also the Euro Cup soccer tournament that is expected to add $900 million, the global ad market will increase 3.5 percent in 2016, according to the forecast.
Zenith also said Monday that it now expects digital advertising to overtake TV as the biggest ad category globally in 2017, a year earlier than it had previously projected and in line with a December forecast from Magna Global.
“Digital continues to grow at the expense of print media as consumers shift their attention to consume content digitally via mobile apps and other outlets,” Zenith said in its section on the U.S. outlook. Industry observers have been discussing if digital spending has also started eating into TV ad revenue.
“TV remains the medium most used by consumers,” added Zenith. “While traditional television viewing on a TV screen continues to slowly decline, overall consumption is up, driven by growth in digital video viewing, including on mobile and computer devices. Networks are continuing to focus on recapturing audiences across other screens, fueling growth of their digital and mobile business.”
But Zenith also warned: “Although broadcast ad spend continues to account for a big chunk of spend dollars, we will start to see other vehicles chip away at its viewership.”
Discussing the economic outlook worldwide, the firm said Monday: “The global economy faces clear challenges — such as the ongoing slowdown in China, and recession in Brazil and Russia, the humanitarian disaster originating in Syria, and uncertainty over the future of the European Union, notably continuing fragility in Greece and the possible departure of the U.K.” But it argued that advertisers have continued to spend despite those factors.
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