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Global Advertising Spend to Rise 4.6% to $579 Billion in 2016

LONDON — Global advertising expenditure is on course to grow 4.6% to $579 billion this year, up from 3.9% growth last year, media research agency ZenithOptimedia reported Monday.

Its optimism is driven by the prospect of three special events this year, rapid recovery from the markets most affected by the eurozone crisis, and the emergence of fast-growing markets that are opening up to international advertising.

“Rapid growth from countries that are relatively new to the international advertising market, combined with a resurgence of established markets that were damaged by the financial crisis, will keep the global ad market on track for healthy growth for at least the next few years,” said Jonathan Barnard, head of forecasting at ZenithOptimedia.

Special events boosting ad expenditure this year include the U.S. presidential election, the Summer Olympics and the UEFA soccer championship in Europe. ZenithOptimedia expects these events to add a net $6.1 billion to the global ad market in 2016 ($3.2 billion from the election, $2 billion from the Olympics and $0.9 billion from the soccer). These three events will add 1.1% to this year’s growth rate for global advertising expenditure, which would otherwise be 3.5%.

The global economy continues to face challenges — such as the slowdown in China, recession in Brazil and Russia, the humanitarian disaster originating in Syria, and uncertainty over the future of the European Union, notably fragility in Greece and the possible exit of the U.K. — but advertisers’ confidence has remained largely unshaken.

Most of the European ad markets that suffered the deepest cuts from the financial crisis and its aftermath are now enjoying sustained recovery and will expand rapidly over the next few years. Ad spend in Ireland, Portugal and Spain fell by 45% between 2007 and 2013, but recovered by 8.9% in 2014 and 7.3% in 2015. ZenithOptimedia forecasts average growth in these countries of 6.7% a year to 2018.

Other European markets that fell sharply during the crisis but are now growing at a rapid pace include Croatia (forecast to grow by 6.1% a year to 2018), Denmark (7.3%), Hungary (5.2%) and Romania (6.3%). Even Greece is expected to enjoy annual growth of 3.9%. These markets have room to grow rapidly for several years to come — after all, they have a lot of ground to make up.

ZenithOptimedia identifies 30 rising media markets with long‐term potential for rapid growth. These include Algeria, Angola, Bangladesh, Bolivia, Cambodia, Cameroon, Cote d’Ivoire, Dominican Republic, Ethiopia, Gabon, Ghana, Guatemala, Iran, Jamaica, Kenya, Laos, Mongolia, Morocco, Mozambique, Myanmar, Namibia, Paraguay, Senegal, Sri Lanka, Tajikistan, Tanzania, Trinidad and Tobago, Tunisia, Uganda and Zambia. ZenithOptimedia forecasts advertising expenditure in these 30 markets to grow at an average rate of 15% a year between 2015 and 2018 — more than three times faster than global average — and to increase by $3.9 billion to $11.6 billion.

Internet advertising is the main driver of global ad spend growth, and is expected to grow at more than three times the global average rate this year — by 15.7%, driven by social media (31.9%), online video (22.4%) and paid search (15.7%). Internet advertising’s growth rate is slowing as it matures (it was 21.1% in 2014), but ZenithOptimedia expects it to remain in double digits for this year and 2017. This sustained growth, combined with downgrades to television in Brazil and China, has led the agency to forecast Internet advertising to overtake television advertising globally in 2017, a year earlier than it forecast back in December.

The great majority of new Internet advertising is targeted at mobile devices, thanks to their widespread adoption and their ever‐tighter integration into consumers’ daily lives. ZenithOptimedia forecasts that mobile advertising expenditure will increase by $64 billion between 2015 and 2018, growing by 128% and accounting for 92% of new advertising dollars added to the global market over these years.

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