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Global advertising spend - the winners and losers

Cape Town - Advertising spend on digital media could reach more than 27% of total global media spending in 2016, according to Carat’s updated forecasts for worldwide advertising expenditure.

Carat, a global media network company, on Friday published new data from 59 countries, which showed that advertising expenditure across a variety of media is expected to reach $548.2bn in 2016. That is a 4.4% increase from last year. 

The positive outlook is attributed by high-interest media events, Carat said in a statement, such as the Euro Soccer championship, the 2016 Rio Olympics and Paralympics and the impending presidential elections in the United States (US). 

Although TV advertising is expected to retain the highest share of total media spending of 41.1% in 2016, it could grow at a more moderate rate of 2.3% in 2017. Print advertising on the other hand is forecast to continue its decline of 5.5% this year. 

Carat is of the view that spending on digital media advertising (this includes advertising spend from search, display, online video, social media and cellphones) will grow by 13.5% in 2017 (15.6%: 2016), which will contribute an increase of $20.1bn next year. 

“Digital continues to significantly outpace the growth of all other media and is now the number one media in 13 markets,” said Will Swayne, Carat global president.” 

In 13 out of 59 markets, digital media will be the number one ranking media type, including Australia, Canada, Denmark, Estonia, France, Hong Kong, Hungary, Ireland, Netherlands, New Zealand, Norway, Sweden and the United Kingdom. 

The share of global spend on digital media advertising is expected to be more than 30% in 2017. 

The high growth of digital spend is driven by cellphones, online video, social media and programmatic. 

(Programmatic is defined as the use of software to automate the buying of media advertising through a bidding system.)

Expenditure increases in 2016 on digital media are expected to be: 

- 48.8% for cellphones; 
- 35.3% for social media; 
- 41.3% for online video; 
- 12.3% for paid search; and 
- 32% for programmatic. 

Globally, newspapers continue to be the third largest media type with 11.0% share of total advertising spend in 2016. Its share, however, will continue to decline with a forecast drop to a share of lower than 10% of the total advertising spending in 2017. Magazines are experiencing a similar decline, although at a slower rate, with a 6% share in 2017. 

Thanks to cost effectiveness and flexibility there is still a demand for radio advertising, which is predicted to comprise of a 6.2% share of total advertising spend in 2017. 

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