|

UK to overtake Japan as third-largest ad market by 2024

UK to overtake Japan as third-largest ad market by 2024

WPP’s investment wing, GroupM, has forecast a deceleration in global advertising growth, with this year expected to record growth of 4.8% vs 2018’s 5.7%, followed by 3.9% in 2020.

The US and UK therefore stand out among the larger advertising markets for their “healthy” growth expectations. In figures released last week, GroupM predicted a rate of growth in the UK of 7.8% this year and 6.7% for 2020.

According to the global edition of the media agency network’s ‘This Year, Next Year’ report, the UK has grown 44% over the past five years – and is likely to overtake Japan as the third largest advertising market by 2024 if its rate of growth continues.

Comparatively, Germany – which was tied with the UK as the fourth-largest market in 2014 – has grown 7% over the same period.

Overall, the sector’s growth has been driven in the main by digital-first brands. Digital advertising accounts for 60% of total advertising in markets including China, the UK, Sweden and Denmark.

GroupM estimates that the digital advertising market will reach $230 billion in 2019, with Google and Facebook to generate in the region of $175 billion.
[advert position=”left”]
Other significant digital advertising companies – including Microsoft, Amazon, Verizon, Twitter and Snap – will generate around $25-30 billion between them.

Internet-related advertising is now “unambiguously” the most important medium globally, the report added, with $326 billion in ad revenue during 2020, up from $294 billion in 2019.

However, among “traditional” media, the picture varies.

As in the UK, the global outdoor ad market is growing faster than the rest of the industry – excluding “pure-play” digital. Growth will slow from 5.3% in 2018 to 1.8% this year, GroupM predicts, before jumping to 2.5% in 2020 and 3-4% in following years.

Outside of China and Japan, OOH estimates rise to 6.8% in 2018, 4.2% in 2019, and 4.9% in 2020.

Audio declined by -1.1% globally in 2019 but should grow +1.8% in 2020, while global television ad revenue is expected to drop -3.5% in 2019, excluding US political advertising.

Meanwhile, print newspapers and magazines continue to see downwards growth trends, at -11% and -10% in 2019, respectively.

However, despite “generally unfavourable growth trends”, marketers should regularly assess opportunities to use media beyond television and pure-play digital, GroupM said.

“Just because a medium is growing slowly or declining does not mean it cannot be impactful for a marketer now or in the future. What matters is whether or not the media owner is investing in opportunities to connect with audiences.

“Moreover, ongoing investments into alternative sources of media inventory — and finding best practices that exist within them — may help improve the use of traditional TV and digital media, both of which are likely to persist as the dominant forms of media into the future.”

Media Jobs