In reviewing the latest reports from Magna, eMarketer, PriceWaterhouseCoopers and ZenithOptimedia it appears that the global advertising market is expected to generate about $504 billion in 2017, up 3.7% from 2016.
The growth in 2016 was +5.9%, but the Olympics and U.S. Elections contributed a lot to that growth. Global advertising growth is expected to re-accelerate to +4.5% in 2018 with the return of even-year events (Football World Cup in Russia, Mid-Term U.S. elections, Winter Olympics in South Korea.)
The lack of cyclical events in 2017 (Olympic Games or U.S. elections), and the U.S. market itself, are contributing the bulk of the global slowdown.
In the U.S. advertising sales are expected to grow by +1.6% to $185 billion, (37% of the total world market). In 2016 there was a record growth of (+7.7%) due to the reasons stated earlier.
Western Europe is expected to see a drop of 2.4% in 2017 while Central and Eastern Europe will both grow by around 5.6%. Asia-Pacific is forecast to see a growth rate of 5.4%, similar to 2016 and Latin America's ad spend growth is expected to be about 6.2%.
Print Advertising
Print advertising sales will continue to struggle in 2017: newspapers and magazines will lose an average 9% and 10% of their advertising revenues respectively.
In the U.S. print-based advertising sales (newspapers and magazines) have now been decreasing for the last ten straight years due to the erosion of readership and the competition of digital media, but there has been an acceleration in the rate of decline of print ad revenues starting in late 2016. In 2017, print ad sales will fall -13% to $18.1billion, down to just a third of the $54 billion in ad sales it captured ten years ago, with a similar trend for daily newspapers (-13%) and magazines (-12%)
Digital
Online advertising sales worldwide will grow by +14% in 2017 to $204 billion or 40% of total advertising revenue. Digital media has now surpassed linear television to become the No.1 category in advertising revenues. Within digital, 54% of advertising sales is generated by impressions and clicks on mobile devices.
Digital video remains a bright spot in the US ad spending economy. In the U.S. digital media ad sales will increase +14%, by more than $10 billion in 2017, to $83 billion. It will account for 45% of total media spend in the U.S. By 2019, digital media will account for half of all advertising sales in the U.S., and will surpass the $100 billion mark to end the year at nearly $103 billion.
Within digital, mobile will become the dominant format this year, with a 58% share, as it grows +34% to $48 billion. Mobile advertising will go on to account for nearly half of all advertising sales by 2021, with a 46% share, and up to $96 billion.
Offline ad sales (television, print, radio, out-of-home) will decrease by -2% in 2017. Last year revenue for these non-digital categories was flat.
Video
Video is expected to be the only growth category among display formats this year, and its projected growth exceeds that of search. Furthermore, a rising percentage of US video ad dollars are being transacted programmatically.
eMarketer reports that in 2017 there are expected to be 221.3 million digital video viewers in the U.S. That will rise about 8% to 239.2 million by 2021.
Television
Only 36% of ad sales are for television and they will be down (-1%) for the first time since 2009.
Broadcast radio ad revenues were essentially flat for the last four years (-0.4% in 2016) but it is expected to get worse in 2017 (-2%) as audio streaming and other digital formats take budgets off traditional linear radio
Video Opportunities For Photographers
Many in the stock photography community are looking to video clips as the savior for the future as the demand - and pricing – continues to decline relative to supply. There does seem to be an increase in sales of stock video clips compared to still imagery.
But, there are some big questions. The cost of producing good video clips is much higher than still imagery and there is a heavy learning curve for someone trying to transition from stills. In addition, the supply is growing very rapidly. Maybe faster than the demand.
While it is clear that a dramatically increasing amount of video is being used online, some believe that most of this will be more “authentic,” produced entirely by the company on whose website it appears and that the producers will not need “clips” in the same degree that they were needed for television advertising and productions. For more on the potential for the growth in demand for clips check out
this story. In addition
Jim Erickson’s ideas on the kind of stock video that will be needed may also be worth considering.