Dentsu Aegis forecasts improved ad spend outlook for 2018

Published on:

Dentsu Aegis Network’s latest Ad Spend Forecasts, based on data received from 59 markets, puts global growth at 3.6% in 2018, up from 3.1% in 2017. 

Asia Pacific ad spend growth is forecast to accelerate to +4.2% in 2018, up from +3.5% in 2017. The region is forecast to be the leading contributor to global ad spend growth in 2018, contributing 39.7%, US$8.1 billion of the total US$20.3 billion incremental global increase, led by markets China, Japan, India and the Philippines (see table below). 

Events will play an important role in 2018, Winter Olympics, Commonwealth Games, Asian games and state elections are all expected to stimulate ad spend growth. However, a slowing of growth in markets like Australia and China can be attributed to multiple contributing factors such as a naturally maturing market, ad fraud and data accuracy issues on top of a general economic slowdown. 

Within this context, digital media channels continue to disrupt ad spend in 2018:

  • Digital media channels will continue to power ad spend growth, growing globally by 12.6% in 2018, versus 15% in 2017, to reach US$220.3 billion
  • Mobile will go from strength to strength, reaching US$121.1 billion having overtaken desktop as a share of total digital spend in 2017. Desktop will continue to lose global share (-1.5% since 2016), versus mobile’s gains (8.2% since 2016) 
  • Digital overtakes TV, by a margin now exceeding previous forecasts. Digital ad spend will account for 38.3% share of total ad spend, TV 35.5%
  • Paid search accounts for the lion’s share (40%) of digital ad spend, with voice-activated devices helping to power its growth. Amazon's Alexa app was the top app for Android and iPhone on Christmas Day 2017, with the company claiming its devices enjoyed the best holiday season yet
  • Video (24.5%) and social (23.5%) will also drive growth within digital ad spend, powered by smartphone take-up and mobile-video in particular
  • Programmatic spend will rise by 23% as established players and startups compete over ad tech

Commenting on the latest forecasts, Jerry Buhlmann, CEO of Dentsu Aegis Network, said:

“The latest ad spend forecasts show a market in transformation, but not recession. The challenge for brands is to navigate an uneven economic outlook alongside a rapidly evolving tech & innovation landscape. In many markets, disruptive innovation - from mobile, voice activation and new ad tech players – is still providing new sources of growth and we forecast this trend will continue into 2018.” 

“Succeeding in this environment requires global consistency through appropriate platforms and systems, while also the flexibility and agility to work with a wider ecosystem of tech-enabled solutions. It demands a relentless focus on understanding the consumer, using data to reach real people, driving relevance, addressability and business growth.

Nick Waters, CEO of Dentsu Aegis Network Asia Pacific, added:

“Asia Pacific continues to lead the growth in digital ad spend. With the region’s fast adoption of technology and innovation, there will be a substantial shift towards mobile and smart devices. As a result, mobile online video ads will be the main drivers of growth within digital ad spend across the region.”

“Data continues to be central to our business in Asia Pacific and with better understanding of new technologies, structures and models for business growth, agencies must help brands move from being disrupted to disruptor.''

Table: Forecast ad spend growth rates by region and country  

Year on year % growth at current prices

GLOBAL4.7 (4.8)3.1 (3.8)3.6 (4.3)
NORTH AMERICA4.8 (5.0)2.5 (3.6)3.1 (4.0)
USA5.0 (5.0)2.6 (3.6)3.2 (4.0)
CANADA0.1 (3.1)0.0 (3.1)1.1 (2.7)
W. EUROPE4.1 (4.0)3.3 (3.5)2.6 (3.6)
UK6.1 (6.1)3.2 (4.0)2.9 (5.9)
GERMANY2.8 (2.3)2.2 (2.6)2.6 (3.0)
FRANCE0.9 (0.9)1.7 (1.6)2.0 (2.0)
ITALY3.5 (3.5)0.9 (0.8)1.9 (1.5)
SPAIN6.8 (6.8)1.9 (5.0)1.4 (3.6)
C&EE7.6 (7.6)8.3 (6.6)7.4 (6.0)
RUSSIA11.4 (11.4)12.9 (9.8)10.4 (7.8)
ASIA PACIFIC4.6 (4.7)3.5 (4.3)4.2 (4.6)
AUSTRALIA4.5 (4.8)2.7 (4.1)2.9 (4.8)
CHINA7.4 (7.4)6.0 (6.0)5.4 (5.4)
INDIA11.9 (11.9)9.6 (13.0)12.5 (12.2)
JAPAN1.9 (1.9)1.0 (1.7)1.6 (1.7)
LATIN AMERICA9.1 (11.9)8.1 (7.0)8.8 (8.9)
BRAZIL5.4 (5.4)2.1 (2.1)5.0 (5.0)

Figures in brackets show our previous forecasts from June 2017