Advertising spend forecasts for 2018 paint a picture of “a market that in transformation, but not recession”, said multinational media and digital marketing communications company Dentsu Aegis Network in its latest bi-annual report released on Friday (Jan 12).
According to the Dentsu Aegis Network Global Ad Spend Forecasts January 2018 report, global ad spend growth is forecast to accelerate to 3.6% in 2018, up from 3.1% in 2017.
And the Asia Pacific (APAC) region is expected to be the leading contributor (39.7%) to global ad spend growth this year.
Playing an important role in the stimulation of ad spend growth in the new year are events such as the Winter Olympics, Commonwealth Games, Asian games and state elections.
Within APAC, this growth will be led by high-growth ad markets like India, China, Japan, and the Philippines – with India leading the pack.
India is expected to see an impressive 12.5% growth in 2018, up from 9.6% in 2017, showing promising economic growth for the nation.
While China is still a high growth market, with an estimated 5.4% increase in ad spend in 2018, it has also showed signs of slowing down. Its 2018 growth signals a dip from its 6% growth in 2017, and the nation is forecast to see even slower growth in 2019 (5.3%).
This can be attributed to a variety of factors such as a naturally maturing market, ad fraud and data accuracy issues, on top of a general economic slowdown.
“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,” said Mr Nick Waters, CEO of Dentsu Aegis Network Asia Pacific, in a statement.
“As a result, mobile online video ads will be the main drivers of growth within digital ad spend across the region”.
In fact, digital media spend is forecast to increase by 30% in 2018, surpassing traditional television spend for the first time.
It will continue to grow at 12.6% in 2018, reaching $220.3 billion (S$291.22 billion) in ad spend, with video and social being key growth drivers.
Having overtaken desktop spend in 2017, mobile spend is forecast to increase by 23.8% in 2018 to reach $121.1million (62% of digital spend in 2018).
“The challenge for brands is to navigate an uneven economic outlook alongside a rapidly evolving tech & innovation landscape,” said CEO of Dentsu Aegis Network Mr Jerry Buhlmann.
“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”.