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Indonesia and India set to ‘steal the show’ as APAC tipped to lead global ad growth in 2017

Asia Pacific will be among the two fastest growing regions in ad spend in 2017 with Indonesia and India leading the way, according to forecasts.

adspend6Research from market analytics firm IHS Markit estimated global ad revenue will climb more than 11% to $590 billion next year.

The growth will be led by the Middle East and Asia Pacific, it said, “where India and Indonesia will steal the show”.

“Developed markets are likely to slow down in an “event-light” year following high spending for the Olympics and the US elections,” the report said.

IHS said online spend will climb 14%, but suggested Facebook and Google will see a deceleration in revenue growth as a result of “not attracting TV budgets to their online video offerings as fast as they had hoped”.

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Looking at 2016, the report forecast a rise in ad revenue of just over 7% to $532bn, aided by a strong global economy and boosted by the Olympics, European Football Championships and US election.

“The advertising industry is about to turn the corner thanks to the global economy getting back on track,” said Eleni Marouli, principal analyst, IHS Technology.

Brands have tried to take advantage of increased consumer spending, with advertising revenue accounting for 0.69 percent of global GDP, up from 0.66 percent in 2015.

A slowdown in the Chinese and Brazilian economies – both described as “rising stars” in 2015 – were blamed for a slight decease in the revenue share generated by the top 10 markets, which fell from 76% to 75%.

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Nevertheless, ad revenue in China is forecast to climb from $81.6b in 2015 to almost $97b in 2016. Online ad revenue in China is expected to be 17 percent greater than TV advertising revenue, a difference of $15 billion.

Japan will remain the third largest market for ad spend, rising from $29b in 2015 to almost $30b.

Despite the growth of digital advertising, TV will remain the number medium globally, accounting for $192b of ad revenue, or 36%.

“Despite the incredible growth of online giants like Facebook, Google and Snapchat, the TV market continues to benefit from big brand budgets,” Marouli said. “The quadrennial events such as the Olympics, the European Football Championship and the US elections helped keep TV on top.”

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Online advertising will account for almost $160b, or 30% of global revenue. Print advertising sits in third with $101b, followed by radio with 8.4% of the market and $47b in revenue.

However, Marouli said revenue from online advertising will overtake TV within the next five years. “In some countries such as the UK, online already accounts for almost 50 percent of total advertising revenue and will only keep getting stronger” she said.

The most mature markets are mostly high GDP per capita markets, according to the IHS report. Israel topped the list at $719 per person in advertising spend, followed by Switzerland and the US.

China generated only $65 per person in advertising, despite being the second largest advertising market.

Zimbabwe was the last on the list with $0.002 ad revenue per person per year.

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