“Small and steady” may be the right way to describe global ad spending over the past few years. And according to Diego Vasquez of Media Life, it may continue that way for a few more years.
In his article “Behind the 2014 global ad forecast,” Vasquez talked to GroupM’s Adam Smith about their reduced forecast for 2014 ad spending worldwide.
Citing several political and economic issues that still plague many countries, Smith predicts that growth will be somewhere around 4.6% for the year, down from their original projection of 5.1%.
“In Europe consumer spending power is still constrained by debt, stagnant wage growth and slow job creation,” Smith was quoted in the Vasquez article. “Brazil, Turkey, Russia, the ASEAN group, the Gulf States – all are running a little cooler for a variety of reasons including commodities, competitiveness and capital.”
And while China is poised to provide some serious stimulus, “the apples are harder to reach,” says Smith.
The good news is there’s no reason to expect spending to fall below last year’s figures, and there are some bright spots that indicate growth is likely, especially in the UK.
“Advertising in my home market of the UK picked up suddenly in 2013,” said Smith. “I attribute the UK recovery to corporate confidence that finally investment is worth resuming.”
For ink-on-paper advertising, Smith expects ad spending to continue to contract, saying “Press can still pack a punch with rapid reach and in response ROI, but every year its pricing has to flex as the newsstand habit fades. I expect the totality of print advertising will find a floor and start to rebuild within five years as digital substitution becomes normal to consumers.”