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Political Questions Weigh On GroupM Ad Forecast - Broadcasting & Cable

Political Questions Weigh On GroupM Ad Forecast

TV seen rising 2% in 2017
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Because of the weak growth of the world and U.S. economy, as well as political uncertainty, GroupM has slightly lowered its forecast for 2017 U.S. ad spending to $183.5 billion, up 2.6% from 2016.

Despite the overhang of uncertainty tied to outcomes of the U.S. presidential election and the U.K. referendum on departing the European Union, advertising budgets have not yet been impacted, the major media buyer noted.

TV spending in the U.S. will grow 2% in 2017, according to GroupM’s forecast, down from the 4.1% increase seen in 2016.

Digital is expected to grow 8.8% in the U.S. in 2017, up from 7.8% in 2016. Search will grow 8%, while other digital platforms jump by 10%, GroupM predicts.

GroupM inched up its forecast for U.S. advertising growth in 2016 to 3.2%. TV’s projected 4.1% growth compares to an earlier forecast of 3.4%. Lower than expected TV spending on political ads was offset by strong demand for advertising during the summer Olympics.

Worldwide, GroupM forecasts that global advertising will grow 4.4% to $547 billion in 2017, with digital’s share reaching 33 cents.

Digital and TV account for nearly all of advertising’s growth, with 72% of all new ad dollars going into digital and 21% buying TV.

“Ad growth has shadowed the global economy's long, low and level recovery cycle since 2010. These new forecasts emphasize the ad story of our times is however structural, not cyclical,” said Adam Smith, GroupM’s futures director. “Twenty years on from the internet becoming a measured ad medium, digital remains the engine of advertising growth and disruptor-in-chief of the entire marketing economy,” remarked Smith. “This multiplies options, opportunities and risk. The importance to advertisers of autonomy and diligence has never been higher.”

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