BLACK
 
 
FEBRUARY 8, 2018
   
2018 Forecast: What to Expect in the Year Ahead
 
Welcome to the BLACK Letter,
a monthly update on trends and topics in advertising. In this edition, trends to watch for 2018.
 
 
 
 
 
Each new year brings with it new resolutions, new goals and new … ad revenue targets. As with anything one tries to accomplish, it’s always best to have the right information at hand to make the most effective decisions.
 
That’s why we’ve pored over the pontifications for the year to come – to help you understand what to expect from the global ad market in 2018.
 
As JCDecaux reports, experts predict 4%- 5% growth in the global ad market in 2018, aided by large-scale events in 2018 like the Olympics, FIFA World Cup and the US Mid-Term elections.
 
Group M, the media investment arm of WPP, forecasts global ad growth of 4.3% in 2018, whereas Magna anticipates net advertising revenues will grow 5.2%. Meanwhile, leading forecaster ZenithOptimedia lowered its prediction for global advertising expenditure growth in 2018 to 4.1% from an expected 4.2%, but noted that Canada’s strong economy contributed to a growth in North American ad spending.
 
Diving deeper beyond these big-picture forecasts, a few key trends emerged. Here are three things to keep your eye on in the coming year.
 
 
 
 
 
Digital Out-of-Home on the Rise
As Magna Global reports, Out-of-Home (OOH) growth of 3% will reach an all-time high of $30 billion USD in 2018, and grabbing 6.3% of market share – a record high since 1993. This growth is attributed to Digital Out-of-Home (DOOH) which, says Magna, will grow by 15% in 2018, reaching $5 billion USD and accounting for 18% of total OOH spend (excluding cinema).
 
Forecasts from ZenithOptimedia forecasts are equally rosy with expectations of 6.6% global share in 2018. This growth, says GroupM, comes as DOOH becomes “more data-informed, digital and versatile. The combination of location data with purchase, social media and viewing behaviour presents an increasingly compelling proposition.”
 
 
 
 
 
Digital Continues to Challenge TV
A year of Big TV Events is sure to bolster the investment in television, and linear TV ad revenues are expected to grow 2.5% in 2018, according to Magna. But dig deeper and it’s revealed that TV would be flat next year (-0.1%) instead of being up.
 
That reflects the fact that digital advertising sales surpassed television for the first time in 2017, reaching a 41% market share (compared to 35% for linear television).
 
As for 2018, the market share of digital depends on whom you ask. Magna anticipates that digital media sales will reach 44% of total ad sales in 2018 and 50% by 2020 ($291 billion). Zenith predicts 44% by 2020 and GroupM anticipates digital will capture 36% market share with 11.3% growth in 2018.
 
 
 
 
 
All Eyes on Facebook
"One of the big subtexts in the story of the rise of digital is the how much ad spend is being funneled to Google and Facebook. GroupM estimates that in 2017 those two digital behemoths accounted for 84% of all digital investment (excluding China). And ZenithOptimedia reports that search, mobile video and social outperforming all other formats; mobile ad spend accounts for a 29% of digital ad spend and 65% share of internet, it says.
 
Yet as these predictions were being released, Facebook dropped the news that it was deprioritizing content from businesses and media companies in its news feed. While a potentially devastating blow to publishers, the impact of this algorithmic change on marketers is yet to be seen. Some analysts think that the ad business will power through, while others think this will result in a rise in video [paywall].
 
Regardless, when it comes to digital ad spending, this is the story to watch in 2018. In the meantime, Google’s ready to take your digital ad dollars!
 
 
 
 
 
To find out how to reach the right people at Billy Bishop Airport, contact sales@black-co.com
 
 
 
 
ESSENTIAL READING
  1. Ad Spend Forecast Update 2018: DOOH, Google and Facebook drive Growth
  2. MAGNA 2018 Global Forecast
  3. GroupM: Global Ad Investment Will Grow 4.3% in 2018; Six Countries to Drive 68% of Incremental Investment
  4. Group M Unveils Upbeat Global Adspend Forecast for 2018
  5. Global advertising expenditure to grow by 4.1 pct in 2018: Zenith
 
 
 
 
 
Copyright 2018 K.D. Black & Company Inc. All rights reserved.

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