[From Inside Radio]

 

Buoyed by even-year events, the global ad market continues to make positive gains in 2016, with growth looking to extend to next year, according to a new forecast by Carat North America. The ad agency forecasts that global ad revenue will hit $548.2 billion in 2016, a 4.4% increase compared to a year ago.

Carat expects the strong trend to continue into 2017, with global ad spending growing 4% to $570.4 billion.

The North American market is particularly strong, with 5% growth expected this year due in large part to spending on the Rio Summer Olympics and the U.S. presidential election. Carat says the elections alone will generate $7.5 billion in political ad spending on U.S. media, with TV—and local TV in particular—claiming about 70% of spending.

Globally, radio advertising is forecast to grow 2.4% this year, up a fraction from 2.2% growth that Carat predicted in a March 2016 report. Next year, Carat predicts radio will be flattish with 0.6% growth. According to its latest estimates, Carat says TV spending will grow 3% this year and 2.3% next year, while digital advertising jumps 15.6% this year and another 13.6% next year.

“Digital continues to significantly outpace the growth of all other media and is now the No. 1 media in 13 markets,” said Will Swayne, Carat’s Global president. “Digital, and the data created, is redefining brands and agencies’ ability to go to the market with greater insight, addressability and agility.”

Despite digital’s strong growth rate, TV will continue to be the dominant media category, commanding 41.1% of global ad spend in 2016 and 40.3% next year, while digital media grows from 27.7% this year to 30.2% in 2017.

Radio will maintain its market share, which stands at 6.4% this year and is expected to fall slightly to 6.0% in 2017. “Cost effectiveness and flexibility contribute to maintain demand for radio,” the report notes.

While newspapers still command 11% of global ad spend this year, it will fall back to 9.9% next year, as ad spending drops 7.1% this year compared to a year ago, and will drop back another 5.9% in 2017. Magazines are slightly more stable, accounting for 6.4% of ad spend in 2016 and 6.0% next year; ad spending on magazines will fall 2.5% this year and slide another 1.6% next year. Cinema and outdoor advertising are expected to post positive ad spending growth this year and next.