As the year comes to a close, IPG Mediabrand’s media intelligence division, MAGNA Global is all set with its forecasts for the year ahead. While 2015 appears to be a positive year for most markets, the Middle East and Africa (MEA) region is slated to see an advertising revenue growth of 6.2 per cent. As per Magna, MEA clocked a growth of 6.9 per cent in 2014.
In its latest study of global media owner advertising revenues, covering 73 countries, MAGNA estimates that global ad revenues grew by 5.5 per cent in 2014, to reach the half-trillion mark (USD 512 billion). Advertising sales will grow by 4.8 per cent in 2015 to reach USD 536 billion.
The bigger story however, is digital.
Digital media grew by 17 per cent this year to reach USD 142 billion globally. This is USD 20 billion more than in 2013. The rise of digital is barely slowing down compared to the growth experienced in 2012 and 2013 (18-19 per cent). Digital media (search, display, video, social) now attracts 27.7 per cent of global advertising spend. Digital media revenues are expected to grow by 15.1 per cent in 2015 to reach 30.4 per cent market share.
Digital is still significantly smaller than television at a global level (39.7 per cent share in 2014) but it’s now slightly larger than print and radio combined, and digital media is already the number 1 media category in 14 of the 73 markets analyzed by MAGNA. Middle East markets are contributing to this growth.
According to MAGNA’s study. in 2015, digital will become the number one media category in UAE. Bahrain and Qatar will join the digital first league in 2016 and 2017.
Where And When Digital Becomes The #1 Media Category
| 2013 | 2014 | 2015 | 2016 | 2017 |
| 9 countries | 14 countries | 16 countries | 20 countries | 23 countries |
| Canada | …same plus.. | France | Bahrain | New Zealand |
| Czech Republic | Australia | UAE | Poland | Qatar |
| Denmark | China | South Korea | United States | |
| Estonia | Finland | Switzerland | ||
| Germany | Hungary | |||
| Netherlands | Ireland | |||
| Norway | ||||
| Sweden | ||||
| United Kingdom |
The Digital Deflation Phenomenon
Digital media buying is also being revolutionized by programmatic trading technologies. Digital media inventory transacted through programmatic methods – data-based automated transactions including, but not restricted to, real-time bidding (RTB) – reached USD 21 billion globally this year (52 per cent). Globally, programmatic spend grew to 42 per cent of total display-related (banners, social, video) spend this year, compared to 33 per cent last year.
The rise of digital has a dual effect on the total size and growth rate of the overall advertising market.
On one hand, digital media is expanding the ‘media’ pie by attracting budgets previously spent with below-the-line mechanisms (direct mail, directories, in-store etc.) and by ‘long tail’ small and local businesses (some of whom were perhaps not spending anything in marketing). This is clearly a source of growth for search and social in particular.
On the other hand, the budgets shifted from traditional media (TV, print, radio, OOH) to digital media create a deflationary environment, reducing the media pie and slowing down ad spend growth prospects in the mid and long term, referred to as the ‘digital deflation’ phenomenon. When shifting budgets towards digital, advertisers are not just following users and ‘eyeballs’ but also expecting to save on their overall advertising and marketing spend. Any superior return on investment translates into optimization rather than increasing the investment.
Global Media Owner Advertising Revenues (2014-2016)
| Traditional Media | 2014 | 2015 | 2016 | Digital Media | 2014 | 2015 | 2016 | |
| Television | 203.4 | 209.4 | 222.0 | Search* | 70.3 | 80.4 | 89.8 | |
| Growth | 5.2% | 3.0% | 6.0% | Growth | 15.6% | 14.3% | 11.7% | |
| Market Share | 39.7% | 39.0% | 39.0% | Market Share | 13.7% | 15.0% | 15.8% | |
| Newspapers | 71.9 | 69.1 | 66.7 | Online Video* | 11.2 | 15.1 | 19.8 | |
| Growth | -4.3% | -3.8% | -3.5% | Growth | 34.9% | 34.3% | 31.7% | |
| Market Share | 14.0% | 12.9% | 11.7% | Market Share | 2.2% | 2.8% | 3.5% | |
| Magazines | 28.7 | 26.9 | 25.4 | Display* | 29.3 | 30.5 | 31.8 | |
| Growth | -7.3% | -6.3% | -5.8% | Growth | 5.3% | 4.2% | 4.3% | |
| Market Share | 5.6% | 5.0% | 4.5% | Market Share | 5.7% | 5.7% | 5.6% | |
| Radio | 32.6 | 32.9 | 33.3 | Social* | 16.6 | 22.8 | 29.1 | |
| Growth | 0.1% | 1.1% | 1.2% | Growth | 63.8% | 37.3% | 27.5% | |
| Market Share | 6.4% | 6.1% | 5.9% | Market Share | 3.2% | 4.3% | 5.1% | |
| Out-of-Home*** | 30.7 | 31.9 | 33.4 | Other Formats* | 14.5 | 14.6 | 14.5 | |
| Growth | 0.1% | 4.0% | 4.8% | Growth | 3.2% | 0.7% | -0.3% | |
| Market Share | 6.0% | 5.9% | 5.9% | Market Share | 2.8% | 2.7% | 2.6% | |
| Cinema | 2.8 | 2.9 | 3.0 | Mobile** | 30.0 | 43.4 | 59.0 | |
| Growth | 0.9% | 3.1% | 3.2% | Growth | 71.9% | 44.8% | 36% | |
| Market Share | 0.6% | 0.5% | 0.5% | Market Share | 5.9% | 8.1% | 10.4% | |
| Total Traditional | 370.1 | 373.2 | 383.9 | Total Digital | 141.9 | 163.3 | 185.0 | |
| Growth | 1.6% | 0.8% | 2.9% | Growth | 17.2% | 15.1% | 13.3% | |
| Market Share | 72.3% | 69.6% | 67.5% | Market Share | 27.7% | 30.4% | 32.5% | |
| Grand Total | 512.0 | 536.6 | 569.0 | |||||
| Growth | 5.5% | 4.8% | 6.0% | |||||
“In 2014, the long-awaited European recovery finally came in time to partly offset a weaker-than-expected growth in the US and the BRICs. In 2015, the lack of non-recurring events, the continued slowdown of the BRICs and the deflationary effects generated by the rise of digital media will inhibit global advertising growth, in a slight disconnect with the positive acceleration in the macro-economic environment,” said Vincent Letang, MAGNA Global’s Director of Global Forecasting and Author of the report.
