Global advertising confidence rises rapidly, as Nigerian admen lament weak Q1 performance

Confidence in the global ad market is currently improving rapidly. Zenith Media has predicted that global adspend will rise by 4.6% this year, up from our 4.1% forecast in December.

Zenith said over the past three months it has upgraded its forecasts for global growth by 0.5 percentage points, thanks in particular to improved economic growth in China and Argentina. Such a large revision to our forecasts is unusual; “the last time we revised them upwards by so much was back in March 2011. We now expect the global ad market to reach US$578bn in 2018,” the media agency said in a recently released report.

The picture may not exactly be the same in Nigeria because the weaker than expected performance of the first quarter of 2018, does not seem to have inspired much optimism for significant growth in 2019.

The pessimism is essentially fuelled by the disappointing outing of the advertising industry in the last political season, as hopes of a bumper harvest was dampened by low political advertising budget, which left many operators reeling in pains. also many brand felt reluctant to But according to Feyi Olubodun, former Managing Director of Insight Publicis, the industry has begun to pick up gradually, but not at a good pace.

Speaking in he same vein, former President of the Association of Advertising Agencies of Nigeria (AAAN), Mr. Kayode Oluwasona, noted that the industry may still suffer from the sluggishness of the outgone year, stressing that nothing has changed on the macroeconomic level to inspire any optimism for the advertising industry in Nigeria in 2019.
“I personally do not see any serious growth happening, that is on the macro level for the total agency, because if for anything there is nothing new that is happening now, if for example there was a new industry that is opening up like it happened in the case of the banks and telecommunications, we would have expected more” he said.

Meanwhile, in the Zenith Media report, global forecasts for 2019 and 2020 are above the forecasts made three months ago, though not by so much. The forecast for 2019 is 4.4% growth while in 2020, the agency network said it anticipates 4.3% growth. Both forecasts are up by 0.2 percentage points.

China’s economy has surprised analysts with particularly strong growth in early 2018, with industrial production and infrastructure spending beating expectations. Investment in manufacturing has picked up, and business confidence has increased.

“We now expect adspend to grow 8% this year, up from our 6% forecast in December. China is the world’s second biggest ad market, accounting for 15% of global adspend, so an upgrade here has a big effect on the global total. A notable development here is that television has fought back against strong competition from online video and is no longer losing adspend, which it did in 2014, 2015 and 2017. We expect 1% growth in television adspend in China this year, alongside 13% growth in online advertising.

“Argentina has recovered from its 2016 recession more rapidly than expected. GDP grew 2.8% in 2017, beating the IMF’s forecast of 2.5% growth, fuelled by construction, agriculture and foreign investment. We now forecast that adspend will grow 1% in Argentina this year, up from our previous forecast of 2% decline, as consumer spending starts to rise again.

The Philippines and Ireland are also bright spots for ad market growth. The Philippines beat our expectations with 28% growth last year, and we have doubled our forecasts for this year from 11% to 22%. And new estimates of the true scale of digital activity in Ireland has boosted our forecasts of Irish market growth from just 1% to 7% in 2018.