Dentsu’s 2018 ad spend forecasts ‘show a market in transformation, but not recession’


Dentsu Aegis Network’s latest advertising spend forecasts predicts Asia Pacific ad spend growth will accelerate from a 4.2% increase in 2018, up from 3.5% in 2017, because of the upcoming Winter Olympics, Commonwealth Games, Asian games and state elections.

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$20.3bn incremental global increase, led by markets China, Japan, India and the Philippines.

However, the agency points to factors such as a naturally maturing market, ad fraud and data accuracy issues on top of a general economic slowdown as the cause for the slowing of growth in markets like Australia and China

Globally, ad spend is set to grow at 3.6% in 2018, up from 3.1% in 2017, based on data received from 59 markets by the agency.

Dentsu also predicts that digital media channels will continue to be the catalyst for the disruption in ad spend in 2018 and it will continue to power ad spend growth, growing globally by 12.6% in 2018, versus 15% in 2017, to reach US$220.3bn, while mobile will reach US$121.1bn as desktop will continue to lose global share.

Digital will overtake TV and will account for 38.3% share of total ad spend, as compared to TV’s 35.5% as paid search will account for the 40% of digital ad spend, with voice-activated devices helping to power its growth. Video at 24.5% and social at 23.5%, will also drive growth within digital ad spend, powered by smartphone take-up and mobile-video in particular.

Meanwhile, programmatic spend will rise by 23% as established players and startups compete over adtech.

“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,” said Jerry Buhlmann, chief executive of Dentsu Aegis Network.

“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.”

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