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Tag: Adam Smith

  • GroupM reveals 2018-19 ad investment forecast

    GroupM reveals 2018-19 ad investment forecast

    MUMBAI: GroupM, the investment group of WPP Media, has revealed its updated 2018-19 ad investment forecasts. The growth projections for 2019 are also mentioned from 3.9 per cent to 3.6 per cent, with total new investment anticipated to reach Rs 1.33 lakh crore ($19 billion) instead of the Rs 1.61 lakh crore ($23 billion) earlier predicted.

    The group revealed that the recent US dollar appreciation versus just about every other currency led to the suppression of the predicted growth. Stress on the auto category stood out in feedback from GroupM’s worldwide network, as did the absence of any rebound in CPG investment with traditional media.

    While China remains the largest contributor to the group, 2019 will be its sixth successive year with single-digit ad growth and mark its lowest growth rate yet recorded. Following China, the other top contributors are USA and India. India is expected to contribute Rs 9500 crore ($1.35 billion) of growth.

    GroupM futures director Adam Smith said, “GroupM’s still strong but slightly fraying 2018 view ties to macro questions: tighter money, China’s slowing growth, and the potential for pricey trade wars.”

    He added, “Real interest rates are edging up globally, but serious potential problems remain limited to a fragile five – Argentina, South Africa, Brazil, Turkey, and Venezuela.”

    GroupM forecasts that ten countries will provide 83 per cent of all 2019 growth.

  • Digital ad investment will surpass TV in five more countries: GroupM’s Interaction 2017

    MUMBAI: GroupM has published Interaction 2017, a state of the union assessment of digital advertising worldwide with forecasts on technology developments, media marketplace trends and evolving consumer behaviors informed by experts from WPP’s worldwide network of communications, marketing and data companies. 

    The report offers in-depth insights underpinning digital advertising growth forecasts in 46 markets. Topics covered include ad fraud and marketplace integrity, fake news, privacy, ad blocking, artificial intelligence, augmented and virtual reality, video competition across platforms, live video, advanced television, streaming and on-demand audio, and much more.  In the report, GroupM’s global chief digital officer Rob Norman and Futures Director Adam Smith, also share views on media pricing, the consolidation of economic value in media among a small group of companies, and media consumption and ecommerce trends.

    As reported in its “This Year, Next Year,” worldwide media and marketing forecast, GroupM predicts that digital advertising will capture 77 cents of every new ad dollar in 2017; TV will capture 17 cents. Despite challenges around standards, measurement and supply chain integrity, digital advertising continues to grow rapidly as marketers follow consumers to the media destinations where they spend their time, and increasingly transact for goods and services. Digital investment has already surpassed TV in ten markets* and another five will cross this bar in 2017 (France, Germany, Ireland, Hong Kong and Taiwan), GroupM predicts.

    As the competition for consumer attention and advertiser investment escalates, people worldwide are spending more time with media. On a population-weighted average, the overall time spent with media (the ‘media day’) grew by nine minutes to eight hours in 2016, but time spent with online media grew by 14 minutes. This is attributable to the greater access to media that mobile technologies provide. Mobile similarly contributed to the growth of adult internet users to 2.34B in 2016.

    However, GroupM’s data shows that for now, TV is still king with advertisers when global data is aggregated. TV’s share of advertising investment was largely stable at 42% in 2016; GroupM predicts a share decline to 41% in 2017. TV rode a five-year peak share at 44% from 2010-2014, with only minimal share shedding since then.

    Still, linear TV demographics continued shifting in 2016, with the loss of the 16-24 year-old demographic remaining one of its biggest challenges. Though the global population of 16-24 year-olds only decreased 1% 2014-2016, the average “tonnage” of the 16-24 linear TV audience shrank 16%, with some markets reaching numbers closer to 30%. GroupM clarifies that some of this loss is exacerbated by TV’s other big challenge – the inadequate measurement of TV’s total audience across platforms. GroupM continues to advocate measurement improvements to better evaluate television across all devices in markets across the globe. The absence of close substitutes means that for now, those advertisers seeking this young adult TV audience can be willing to bear price inflation in proportion to its rising scarcity.

    In the report, GroupM also examines the coalescing of economic value among six global companies who hold the lion’s share of digital ad spending, with Google and Facebook at the forefront. GroupM notes that these companies have very different business models than the owners of linear TV, and they also attract different advertisers. Advertisers accounting for 90% of TV advertising revenue represent between 30% and 40% of the revenue earned by the digital giants. The other 70% of their revenue comes from a combination of small and local businesses, often ones that trade in digital products or services. This bifurcation among classes of advertisers is subject to change as television becomes more data-fueled and targeted (more like digital) and as video content on digital platforms continues to be enhanced with greater quality (more like TV).

    “Google and Facebook attracted the vast majority of incremental digital ad investment growth in 2016,” said Smith. “In 2017, the industry will be watching closely to see how Snapchat or Amazon may creep into Facebook’s and Google’s value chain, and if the stronghold that ‘BAT’ (Baidu, Alibaba, Tencent) has in China can expand to international markets.”

    Interaction 2017 also looks at consumer purchase behaviors. In 2016, ecommerce totaled USD 1.874 trillion, globally, fully 20% more than the USD 1.558 trillion logged in 2015. GroupM forecasts 18% growth for ecommerce in 2017, surpassing the two-trillion mark to USD 2.205 trillion.  On average, online shopping per user is projected at USD 869 in 2017. The U.K. remains home to the most active online shoppers, predicted to average USD 4,000 per user in 2017. Combined, Amazon and Alibaba represent more than half of all e-commerce (excluding the travel category).

    “Last year, we were cautious in our estimation of the rate of change, but this year we are less so in the face developments in hardware and software technologies that are advancing us from the information age to the intelligence age,” said Norman. “To help shape our thinking and speculation in this year’s Interaction, we invited more than 20 partners** to discuss AI, augmented and virtual reality, video competition, advanced and data-driven TV, streaming and on-demand audio, the Google/Facebook digital duopoly, live video, ecommerce, marketplace integrity and fake news. The result is both one of the most comprehensive pieces on the state of digital we’ve ever written and also a springboard for marketers to think long and hard about their future. We invite debate that will undoubtedly ensue.”

    (* Australia, Canada, China, Denmark, Finland, the Netherlands, New Zealand, Norway, Sweden, United Kingdom.)

    {** Amazon, AppNexus, comScore, DoubleClick, eMarketer, ESPN, Facebook, Google, Hulu, IAB, IBM, LinkedIn, NBCU, Pandora, Pinterest, The New York Times, Snapchat, Turner, Twitter, Vox Media, YouTube.}

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  • GroupM raises U.S. TV spending forecast to 3.4 per cent

    GroupM raises U.S. TV spending forecast to 3.4 per cent

    MUMBAI: In what comes as a welcome news for the American advertising and television industry, leading media buying agency GroupM, has re-evaluated U.S. TV spending in 2016 to 3.4 percent growth from 2.3 per cent.

    The reason for this raise, a new report from GroupM clarifies, is the influx of campaign money to the ad spends of local TV networks, as both the political parties get more aggressive prior to the country’s presidential election.

    Along with that, there is a return to low single-digit growth in national TV, which is coming from some shifting in spending from digital in the consumer packaged goods category as well as continued spending growth from the heavy TV-centric pharmaceutical sector, GroupM said.

    For 2017, GroupM expects TV growth to decline to 2.1 per cent as local TV cools off in a non-election year. The healthier TV market is also facilitating an increased advertising spending overall in the U.S. for 2016, which the agency estimates to be at 3.1 per cent, up from 2.7 per cent.

    Digital investment will continue to grow at three times the rate of overall advertising spending but will be lower than the double-digit levels seen in recent years.

    “The combination of global economic headwinds coupled with moderate domestic growth as well as continued procurement pressure to extract media efficiencies and cost savings will confine ad market potential to its current low-single digit growth levels,” the GroupM report stated.

    When it comes to worldwide ad outlook for 2016, GroupM has reduced the earlier prediction of 4.5 to 4 per cent as China and Brazil markets cool down. India, though, remains the fastest-growing large economy in the world, increasing at a 14 percent to 15 per cent rate in 2016 and 2017.

    For 2017, GroupM sees ad volume rising at 4.3 per cent to USD 552 billion and total marketing services topping USD 1 trillion for the first time.

    To answer the several Brexit related nervous queries and fears within the industry, author of the forecast Adam Smith said, “At this time, there is no tangible evidence of a Brexit effect in macro indicators nor budgeting decisions. However, in the next six months to a year, it is likely companies will invest less. Job creation, wage growth and productivity will be lower than it otherwise might have been. This is a difference of degree, not magnitude.”

    “There is no evidence of a Brexit-driven recession at the time of this writing, and though some have deferred 2016 advertising investments, worst-case we still see that U.K. advertising growth will reach 4.5 per cent this year, propelled exclusively by the growth of digital. Our base case remains 6.3 per cent, which we will revise as usual in November,” he added.

    (source: broadcastingcable.com)

  • GroupM raises U.S. TV spending forecast to 3.4 per cent

    GroupM raises U.S. TV spending forecast to 3.4 per cent

    MUMBAI: In what comes as a welcome news for the American advertising and television industry, leading media buying agency GroupM, has re-evaluated U.S. TV spending in 2016 to 3.4 percent growth from 2.3 per cent.

    The reason for this raise, a new report from GroupM clarifies, is the influx of campaign money to the ad spends of local TV networks, as both the political parties get more aggressive prior to the country’s presidential election.

    Along with that, there is a return to low single-digit growth in national TV, which is coming from some shifting in spending from digital in the consumer packaged goods category as well as continued spending growth from the heavy TV-centric pharmaceutical sector, GroupM said.

    For 2017, GroupM expects TV growth to decline to 2.1 per cent as local TV cools off in a non-election year. The healthier TV market is also facilitating an increased advertising spending overall in the U.S. for 2016, which the agency estimates to be at 3.1 per cent, up from 2.7 per cent.

    Digital investment will continue to grow at three times the rate of overall advertising spending but will be lower than the double-digit levels seen in recent years.

    “The combination of global economic headwinds coupled with moderate domestic growth as well as continued procurement pressure to extract media efficiencies and cost savings will confine ad market potential to its current low-single digit growth levels,” the GroupM report stated.

    When it comes to worldwide ad outlook for 2016, GroupM has reduced the earlier prediction of 4.5 to 4 per cent as China and Brazil markets cool down. India, though, remains the fastest-growing large economy in the world, increasing at a 14 percent to 15 per cent rate in 2016 and 2017.

    For 2017, GroupM sees ad volume rising at 4.3 per cent to USD 552 billion and total marketing services topping USD 1 trillion for the first time.

    To answer the several Brexit related nervous queries and fears within the industry, author of the forecast Adam Smith said, “At this time, there is no tangible evidence of a Brexit effect in macro indicators nor budgeting decisions. However, in the next six months to a year, it is likely companies will invest less. Job creation, wage growth and productivity will be lower than it otherwise might have been. This is a difference of degree, not magnitude.”

    “There is no evidence of a Brexit-driven recession at the time of this writing, and though some have deferred 2016 advertising investments, worst-case we still see that U.K. advertising growth will reach 4.5 per cent this year, propelled exclusively by the growth of digital. Our base case remains 6.3 per cent, which we will revise as usual in November,” he added.

    (source: broadcastingcable.com)

  • Turner Broadcasting UK’s truTV launches on TVPlayer

    Turner Broadcasting UK’s truTV launches on TVPlayer

    MUMBAI: Turner Broadcasting UK’s new general entertainment channel (GEC), truTV has launched on TVPlayer, the UK’s over-the-top TV platform.

    TVPlayer live streams over 50 free-to-air channels across a wide range of devices including PCs, mobiles, tablets and smart TVs. With over one million users TVPlayer offers broadcasters direct access to younger audiences than existing TV platforms, together with advanced analytical information and audience insight to supplement overnight viewing figures provided by BARB.

    TruTV, a 24-hour channel, provides a destination for UK viewers to enjoy both original and unscripted programming. The launch of truTV in the UK follows the channel’s success in the US where it is watched in 93 million homes. It showcases incredible and exciting content which focuses on real people and situations. Highlights include: Container Wars, South Beach Tow, Tattoo Nightmares and Ink Master, as well as new shows The Carbonaro Effect and Total Blackout, premiering next month.

    Under the agreement, TVPlayer has licensed multi-platform live streaming rights, together with seven day catchup across truTV and truTV+1. The programming will be viewable on WiFI, 3G and 4G allowing consumers to access truTV’s programming from anywhere in the UK. The live streams will be available from 15 January, 2015, with catchup following later in Q.1 this year.

    TVPlayer founder and CEO Adam Smith said, “TVPlayer has seen significant growth through 2014 and we are committed to extending the content offering for our loyal users. truTV is the first of a portfolio of additional channels to be added to TVPlayer this year and we are particularly excited that the content is being made available both live and on demand.”

     

  • GroupM forecasts ad spends to reach $560 billion by 2015

    GroupM forecasts ad spends to reach $560 billion by 2015

    MUMBAI: WPP’s GrpupM is out with its biannual ‘This Year, Next Year’ report forecasting the global advertising investments.

    As per the report the ad spends will reach $534 billion in 2014, a 4.5 per cent increase over 2013. The company predicts investments in 2015 rising an additional 5 per cent to $560 billion.

    In further says that globally, ad recovery is localised, with 17 markets accounting for 93 per cent of expected ad growth in 2014. Even at its moderate 3.4 per cent rate of ad investment growth this year to $162 billion, the US contributes fully one-quarter of incremental ad dollars. China ranks second as it climbs a predicted 9.8 per cent to $76 billion. Other countries making the cut include Nigeria, Kenya and Vietnam.

    “Many companies are still operating with very strong balance sheets,” said GroupM Global president Dominic Proctor. “Coupled with a rising general confidence and a specific comfort around digital marketing, though notwithstanding some geo-political uncertainty, we are seeing an uplift in some of the ‘older economies’ as well as the new.”

    Of marketplace performance, ‘This Year, Next Year’ report editor Adam Smith stated, “Despite the slowdown in China’s general economy from 2012, its consumer economy continues to expand. This, plus intensive digitisation of advertising, keeps China ad investment rising at or near double-digits, with no large print legacy to correct.”

    It is a different story in Western Europe, where 73 per cent of the regional economy is in the Eurozone, where demand remains suppressed by debt, internal imbalances and deflationary politics. In real terms, the Eurozone remains 20 per cent below its 2007 advertising peak, and the hardest-hit ‘periphery’ of Greece, Ireland, Spain, Italy and Portugal, 47 per cent below the peak.1

    Smith added, “Western Europe, however, is the most-digitised ad region in the world; though this may finally be maturing to judge by digital ad investment growth slowing from double- to high-single digits in 2014 and 2015.”

    Western Europe also has the world’s most print-heavy advertising, though here too, the downward adjustments to annual advertising investment are moderating from double- to mid-single-digits in 2014 and 2015.    

    Elsewhere, GroupM notes that some members of its south-east Asia group (Indonesia, Malaysia, Thailand, Philippines, Singapore and Vietnam) face political and economic challenges, and this year will collectively slip from double- to mid-single digit ad growth.

    “This group will still contribute to the global ad recovery, but we are on alert for central banks ‘tightening into the downturn’ if inflation becomes a problem,” said Smith.

    India, Brazil and Russia remain among the faster-growing ad markets, though GroupM warns that its reduced Russia forecast – from an annual run-rate of 10 per cent to 6 per cent — depends on no worsening in domestic affairs. 

  • GroupM downgrades 2013 global ad spend

    MUMBAI: Due to the continuing sluggishness in the US and European economies, the global ad spend in 2013 will grow by 4.5 per cent, as per GroupM’s revised forecast.

    The study revealed that the forecast is almost a full percentage point lower than the 5.3 per cent spending hike GroupM predicted in June.

    The 70-country forecast predicted that global ad spending in 2013 will increase 4.5 per cent compared to 2012, representing $531 billion.

    The revised spending forecast was made in GroupM’s biannual worldwide report, “This Year, Next Year,” which also concluded that 2012 ad spending in measured media will hit $508 billion, a 4.6 per cent increase over 2011 spending of $486 billion.

    For the U.S. market, the report said advertising investment in measured media grew 3.5 per cent in 2012 to $152.4 billion, up from $147.2 billion the previous year.

    For 2013, the new report predicted a less optimistic 2.7 per cent increase to $156.5 billion.

    GroupM chief investment officer Rino Scanzoni said, “Ad spending in 2013 won’t enjoy the boost from Olympic and election-year spending we saw in 2012. At the same time, overall economic conditions in the US do not support more than very moderate advertising spending expansion.”

    GroupM Futures Director Adam Smith said ad investment in the Eurozone periphery (Greece, Ireland, Italy, Portugal and Spain) is expected to fall 15 per cent this year, a 40 per cent contraction from its peak spending year of 2007 and comparable in real terms to 1998 spending levels.

    “Western Europe is the slowest region for ad spending growth, with a 2.6 per cent contraction expected in 2012, the worst year since 2009‘s 11 per cent collapse. Western Europe now accounts for 20 per cent of global advertising, down from 30 per cent in 1999 and heading for 17 per cent in 2017,” Smith added.

    Smith also said that Russia and Turkey continue to lead ad spending growth in central and Eastern Europe, a regional economy that is one-fifth the size of Western Europe but with twice the ad spending growth.

    The study is part of GroupM‘s media and marketing forecasting series drawn from data supplied by parent company WPP‘s worldwide resources in advertising, public relations, market research, and specialist communications.

    The report predicted that investment in digital media would account for 19.5 per cent of measured ad spending globally this year ($99 billion) and 21.4 per cent in 2013 ($114 billion), with respective growth rates of 16 per cent and 15 per cent. Those figures are comparable to the GroupM forecast made earlier this year.

    “Digital ad growth remains strong, sustained and structural, though one or two highly-digitized European markets now look for growth in usage as opposed to new users,” said Smith. “More newsworthy is our rising dependence on digital to support total growth, now furnishing over 60 per cent of new incremental ad dollars in 2012 and 2013. This produces a reciprocal reduction in TV’s contribution, being the only other large growth medium.”

    In other media categories, TV accounted for 43 per cent of measured global media investment in 2012, the same amount recorded for the previous year.

    “We continue to predict TV‘s share of global ad budgets peaking in 2012 at 43 per cent as other screens begin to claim meaningful amounts of consumer time,” Smith added.