GroupM forecasts a return to pre-crisis ad spending next year

Global ad investment to reach $534 billion this year as U.S. and China lead growth

GroupM, WPP’s global media division, is forecasting that advertising investment will reach US$534 billion by the end of the year in its biannual This Year, Next Year industry prediction report.

That’s a 4.5% increase over 2013 investment levels, though agencies are more likely encouraged by the company’s prediction that next year’s investment will increase another 5% to reach $560 billion – “finally exceeding the pre-crisis peak of 2007/2008 in real terms,” according to GroupM.

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Perhaps predictably, most of the growth comes from only a handful of markets. The U.S. will lead the way with 3.4% growth in its market to $162 billion this year (accounting for nearly a quarter of all growth this year), followed by China’s $76 billion year (a 9.8% increase over 2013 and representing 30% of global growth).

• To see what GroupM says about Canada’s ad market, click here.

“Despite the slowdown in China’s general economy from 2012, its consumer economy continues to expand,” said Adam Smith, the report’s editor. “This, plus intensive digitisation of advertising, keeps China ad investment rising at or near double-digits, with no large print legacy to correct.”

Though their markets are quite a bit smaller, Nigeria, Kenya and Vietnam are set to contribute more to the global tally with percentage growth rates of 35.8%, 26.8% and 14.2%, respectively.

However, as has been the case for a few years now, India, Brazil and Russia are reported as the real hotbeds for ad growth thanks to their fast growth and larger size – which will be no small comfort to the agency networks investing in those regions.

However, GroupM did downgrade expectations for Russia’s growth to 6% from 10% and said the situation may worsen depending on its “domestic affairs,” an oblique reference to the country’s ongoing involvement in the Ukraine conflict.

“Many companies are still operating with very strong balance sheets,” said Dominic Proctor, GroupM Global president, in a statement. “Coupled with a rising general confidence and a specific comfort around digital marketing, though notwithstanding some geo-political uncertainty, we are seeing an uplift in some of the ‘older economies’ as well as the new.”

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