Midterm Elections and Digital Growth Have Advertising Surging

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Worldwide, advertising grew a record 7.2 percent to $552 billion, thanks to the surge to politics in the U.S. as well as FIFA World Cup soccer in Russia and the Winter Olympics in South Korea.

Midterm elections had a massively positive effect on media in 2018, helping advertising in the U.S. grow 7.5 percent to an all-time high $208 billion.

Election spending alone contributed $4 billion, also setting a record for the amount spent on political ads in a single year, according to a report from MAGNA, an advertising research and strategies firm.

Worldwide, advertising grew a record 7.2 percent to $552 billion, and MAGNA attributes the surge to politics in the U.S. as well as FIFA World Cup soccer in Russia and the Winter Olympics in South Korea.

The strong results are a welcome surprise given challenges faced by the TV industry with competition from digital streamers and with online companies siphoning off advertising from more traditional sources.

MAGNA, in fact, said digital advertising grew 17 percent in the U.S., where it accounted for 50 percent of the total spending, and it should reach 50 percent globally next year.

The strong growth overall in 2018 caused MAGNA to increase its 2019 forecast to 4.7 percent year-over-year growth.

"Digital media was again the main winner but television proved resilient, thanks to the loyalty of consumer brands, strong pricing and incremental cyclical spend," said Vincent Létang, executive vp global market intelligence for MAGNA.

"Television is the only 'traditional' media category to benefit from such strong pricing power, while print and radio prices are stagnating or even declining in some markets," according to the report published late Sunday.

Meanwhile, another firm, Zenith, issued a competing report Sunday that says the U.S. "will be the leading contributor of new ad dollars to the global market over the next three years, making up in scale what it lacks in speed. China will come second, combining large scale and rapid growth."

Zenith says that internet advertising overtook traditional TV to become the world's biggest advertising medium in 2017, and it remains the fastest growing medium.

"We estimate that internet ad spend grew 12 percent year on year in 2018, and we forecast an average growth rate of 9 percent a year between 2018 and 2021," its report states.

Globally in 2018, television accounted for 32.9 percent of all money spent on advertising in 2018, but that will drop to 29.9 percent in 2021, says Zenith.

Cinema advertising will remain tiny, as it accounted for 0.7 percent of the total globally and will hit 1 percent in 2021.

Television, magazines, newspapers, billboards and radio will all fall in terms of global share of advertising, with cinema, internet display, internet paid search and internet classified each climbing.

By 2021, the U.S. will remain the largest market, followed by China, Japan, the U.K., Germany, Brazil, South Korea, India, France and Australia, according to Zenith.