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Zenith revises global ad spend growth forecast upwards

Published

9 years ago

September 13, 2016

MUMBAI: Zenith Optimedia’s Advertising Expenditure Forecasts is a bellwether for the global ad industry. And the top notch media agency revised its earlier June forecasts for the rest year in an update posted today. Zenith says that global adex will grow by 4.4 per cent to reach $539 billion, much better than 4.1 per cent growth it forecast earlier. It will expand by 4.5 per cent in 2017, and 4.6 per cent in 2018, better than the 4.3 per cent and 4.4 per cent it had earlier estimated. By 2018 global advertising expenditure will total $589 billio, $4 billion more than forecast in June.

The US, the Philippines and Western Europe drive faster adspend growth

This upgrade is mainly the result of stronger-than-expected growth in the US, where a strong labour market has encouraged consumers to increase their expenditure, and advertisers have fought harder for their share of the expanding market. The agency expects US network TV to return to growth this year (at one per cent) after shrinking five per cent last year, thanks to new spending by pharmaceutical and consumer packaged goods companies and a strong upfront. Zenith stated that it expects social media to accelerate from 32 per cent growth last year to 35 per cent growth this year, as advertisers take advantage of new formats, such as in-feed video, and the transition to mobile internet consumption continues. Overall the agency forecasts that US ad spend to grow 4.4 per cent this year, compared to the previous estimate of 3.8 per cent.

Zenith has also made slight upgrades to its adspend forecasts for Asia Pacific and Western Europe. It has revised its estimate for APAC from 6.2 per cent to 6.3 per cent and for Western Europe from 3.5 per cent to 3.6 per cent. Its APAC optimism is based on heavy political spending in the Philippines in the run-up to the May 2016 elections. Its bullishness about Western Europe is courtesy improved conditions in Belgium, Finland, Germany, Italy, Norway, Portugal and Sweden have compensated for the slowdown in the UK.

Mild weakening of UK ad market after Brexit vote

Although the vote for ‘Brexit’ in the UK’s EU referendum came as a shock to many in the market, so far advertisers have reacted calmly, with no widespread budget reductions. Zenith has forecast a 5.4 per cent growth in ad spend this year, fractionally less than its 5.6 per cent forecast just before the vote. The agency says that its view is that most of the impact that Brexit will have on the UK ad market will happen in the long term.

The UK’s new terms of trade with the EU and other countries – whatever they turn out to be – are likely to restrict flows of trade and investment in comparison with the pre-Brexit status quo, leading to slower economic growth and slower growth in advertising expenditure. In the short term, uncertainty about the consequences of the vote will make companies less likely to invest in new products, and consumers less likely to take on big spending commitments. This could lead to anything from disappointingly slow growth to outright recession. Zenith’s current forecasts assume that economic growth will slow but remain positive, in which case UK adspend will grow 3.4 per cent next year, down from its pre-vote forecast of four per cent growth.

Mobile advertising taking over from desktop even faster than expected

In June, Zenith had forecast that mobile advertising would overtake desktop in 2017. And it says its position has not changed on this score, excepting that it has upgraded its forecasts for mobile growth for this year (from 46 per cent to 48 per cent) and next year (from 29 per cent to 33 per cent), and it now expects mobile adspend to exceed desktop by $ 8billion in 2017, up from the $2billion it predicted in June. Zenith expects mobile to account for 60 per cent of all internet advertising by 2018, up from the earlier forecast of 58 per cent.

Desktop to shrink by more than newspapers or magazines to 2018

The agency’s view is that desktop advertising peaked in 2014 at $99 billion and shrank 0.1 per cent in 2015 to $98.9 billion as advertisers switched their budgets to mobile. It now expects desktop advertising’s decline to accelerate over the next few years with spends falling by 0.8 per cent in 2016, 2.9 per cent in 2017 and 7.4 per cent in 2018. Between 2015 and 2018 desktop adspend will have shrunk by $10.7billion, more than the other two declining media – newspapers (which will shrink by $9.6 billion) and magazines ($4.4 billion). Meanwhile mobile adspend will grow by $81.3 billion over the same period, seven times more than the combined growth of television ($7.3 billion), outdoor ($3 billion), radio ($0.9 billion) and cinema ($0.7 billion).

“The global ad market has strengthened over the past few months, thanks mainly to the resilient US consumer,” said Zenith head of forecasting Jonathan Barnard. “So far any impact from the vote for Brexit has been limited, and confined to the UK. We expect the global ad market to strengthen further in 2017 and 2018.”

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Innocean renews global media partnership with Havas

Published

5 days ago

February 6, 2026

indiantelevision.com Team

MUMBAI: Innocean has renewed its global media partnership with Havas Media Network following an internal review across Hyundai Motor Group brands.
The renewed mandate spans Hyundai, Kia and Genesis across Europe, the Middle East, Asia Pacific and Latin America. The work will be coordinated with Innocean’s international teams in Seoul, Frankfurt, Dubai, New Delhi and Jakarta.

The refreshed alliance is designed with a sharper focus on data and technology, aiming to connect the dots across customer acquisition, conversion and retention as the Group’s global audience continues to diversify.

Innocean head of global business Steve Jun, said the extension reflects a shared push for stronger, data-led media performance across key markets. He added that the partnership would focus on creating more connected and effective customer experiences for Hyundai Motor Group brands.

Havas Media Network global CEO Peter Mears, described the relationship as one built on innovation and global scale. He said the next phase would lean on the network’s Converged.AI platform to deliver seamless, data-driven media experiences and drive business outcomes for the automotive brands.

The renewed partnership officially commenced in January 2026.

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Dentsu ad report 2026 flags digital dominance as retail media soars

Published

1 week ago

February 4, 2026

indiantelevision.com Team

INDIA: India’s advertising industry is entering a new phase of structural transformation, with digital media now the central growth engine, according to the Dentsu digital advertising report 2026.

Total advertising spends closed 2025 at Rs 1.21 lakh crore, up 8.3 per cent year on year, and are projected to reach Rs 1.40 lakh crore by 2027, implying a compound annual growth rate of over 7 per cent.

Digital advertising accounted for Rs 71,621 crore in 2025, representing 59 per cent of total spends. By 2027, digital’s share is expected to rise to around 70 per cent, with spends nearing Rs 98,034 crore.

The report stresses that this is no longer a temporary shift but a permanent rebalancing of advertising priorities, driven by mobile-first consumption, short-form video, creator ecosystems, embedded commerce and AI-led optimisation.

Retail media has emerged as the fastest-growing segment, with ad spends on e-retail platforms reaching Rs 17,601 crore in 2025: a surge of nearly 56 per cent year on year. Retail platforms are evolving into full-funnel media ecosystems, linking storytelling directly with purchase outcomes through first-party data.

Within digital formats, social media leads with a 29 per cent share, closely followed by online video at 28 per cent, while paid search contributes 23 per cent. Online video is expected to overtake social as the largest digital format over the next two years.

Programmatic buying now accounts for 42 per cent of digital spends, exceeding Rs 30,000 crore, and is increasingly becoming the default media operating layer across video, connected TV and retail platforms.

FMCG remains the largest advertising category at 30 per cent of total spends, followed by e-commerce at 18 per cent, which also recorded the fastest growth.

Dentsu South Asia chief executive Harsha Razdan said the most meaningful industry shift has been in how consumers consciously allocate attention.

Dentsu South Asia president and chief strategy officer Narayan Devanathan, added that the next growth phase will belong to organisations that successfully integrate creativity, data, media and technology.

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Publicis Groupe posts strong revenue as AI drives demand

Published

1 week ago

February 3, 2026

indiantelevision.com Team

PARIS: Publicis Groupe is laughing all the way to the bank whilst its rivals scramble to catch up. The French advertising colossus reported full-year 2025 net revenue of €14.5bn, marking its sixth consecutive year of outperforming the industry. Organic growth hit 5.6 per cent, accelerating past its five-year compound annual growth rate of 5.0 per cent.

The secret sauce? Artificial intelligence-powered products and services, which contributed roughly 300 basis points to growth. Arthur Sadoun, chairman and chief executive, has staked Publicis’s future on becoming clients’ “most valuable partner” for what the firm calls “agentic business transformation”—essentially helping companies build enterprise-grade AI solutions that actually make money.

The fourth quarter proved particularly robust, with organic growth of 5.9 per cent despite tougher comparisons. Connected media, which accounts for 60 per cent of the business, surged with high-single-digit growth. Creative and production services delivered mid-single-digit expansion. Only the technology consulting arm stumbled, finishing nearly flat for the year as clients adopted a “wait-and-see” attitude—a malaise afflicting all IT consulting firms.

Geography tells a tale of American dominance. The United States, representing 57 per cent of group revenue, grew 5.2 per cent organically for the year, cementing Publicis’s position as the market leader. Europe managed 4.2 per cent growth, whilst Asia-Pacific posted 5.8 per cent, with China impressing at 6.0 per cent. The most dramatic expansions came from emerging markets: Latin America roared ahead at 18.7 per cent, whilst Middle East and Africa surged 10.8 per cent.

Operating margin improved to 18.2 per cent from 18.0 per cent, delivering 50 basis points of operating leverage. Crucially, Publicis reinvested 30 basis points—totalling 230 basis points overall—into AI capabilities, talent upgrades and new business development. The remaining 20 basis points flowed straight to the bottom line. Michel-Alain Proch, chief financial officer, called it “the highest operating margin in the industry”.

Free cash flow before working capital changes reached €2.03bn, up 10.6 per cent from an already-record 2024. The firm deployed roughly €1bn on bolt-on acquisitions targeting identity resolution, pharmaceuticals, influencer marketing and sports marketing. Client retention remained stellar at 98 per cent for top-100 clients, whilst new business wins exceeded $8bn.

Headline earnings per share climbed 6.6 per cent at constant currency to €7.48. In dollar terms—increasingly relevant given Publicis’s American dominance—EPS rose 7.0 per cent to $8.45. The board proposed a dividend of €3.75 per share, up 4.2 per cent, representing a payout ratio of 50.1 per cent, which Publicis claims is the highest in the industry.

The financial fortress looks impregnable. Net debt turned into net cash of €548m by year-end, down from net cash of €775m the previous year after funding acquisitions. The firm maintains €2bn in undrawn committed credit facilities and €4bn in cash and marketable securities. Average net debt to EBITDA stood at a negligible 1.0 times.

Industry sectors showed divergent fortunes. Consumer goods clients increased spending by 20 per cent, whilst automotive rose 14 per cent and financial services climbed 11 per cent. Technology clients, however, cut budgets by 7 per cent, and telecommunications spending dropped 2 per cent.

Publicis’s AI strategy extends beyond client services to internal transformation. The firm is “agentifying” processes using AI agents, equipping all 100,000-plus employees with AI tools through its Marcel learning platform. The goal: make everyone “AI-fluent” whilst boosting productivity and results. The company reckons AI-powered capabilities grew 20 per cent organically in 2025.

Looking ahead, Publicis guided for 2026 organic growth of 4.0 to 5.0 per cent—marking a potential seventh consecutive year of industry outperformance. Operating margin should tick “slightly” higher from the already-elevated 18.2 per cent whilst maintaining “high levels” of investment. Free cash flow is targeted at roughly €2.1bn, based on an exchange rate assumption of €1.20 to the dollar, earmarked for dividends, maintaining a stable share count and more bolt-on acquisitions.

The firm’s longer-term ambitions border on audaciousness. Management projects annual net revenue growth of 6.0 to 7.0 per cent and earnings-per-share expansion of 7.0 to 9.0 per cent, both at constant currency. The logic: AI is fragmenting the marketing landscape, with no top client spending more than 4.0 per cent of budget on any single platform. Publicis reckons its “unique connective tissue” positions it perfectly to orchestrate this complexity.

The advertising world has witnessed a decade-long reshaping. Since 2017, when Publicis began its data and technology pivot, the firm has invested €14bn integrating capabilities whilst rivals dithered. That first-mover advantage in AI has compounded. Publicis now claims the number-one position in global media billings, including in the crucial American and Chinese markets. Its market capitalisation exceeds the combined value of its next two competitors.

Yet competition is heating up as everyone piles into AI. Omnicom’s proposed merger with IPG would create a formidable rival. Technology giants are muscling into advertising with their own AI platforms. And clients are becoming more sophisticated, building in-house capabilities and squeezing agency margins.

Publicis is betting the farm that complexity favours the orchestrator. As marketing technology proliferates and AI agents multiply, companies will need partners who can connect the dots. Whether that vision proves prescient or hubris will determine if Sadoun’s transformation becomes a case study in strategic brilliance or just another expensive pivot that failed to justify its price tag. For now, though, the numbers suggest Publicis is winning the AI arms race in adland—and widening the gap with every quarter.