There has been a ‘mild weakening’ in the UK, but no widespread cuts to advertising budgets, a report has found.
Media agency ZenithOptimedia tracks ad spend and publishes global forecasts. It has upgraded its full-year ad growth forecast for this year from 4.1% to 4.4%. Looking at 2017 and 2018, it now expects growth of 4.5% and 4.6% respectively.
The US market is leading the growth, with the Philippines and western Europe also strong, according to Zenith. US network TV will return to growth in 2016 after a bruising 5% fall in 2015.
“The global ad market has strengthened over the past few months, thanks mainly to the resilient US consumer,” said Jonathan Barnard, head of forecasting at Zenith. “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.”
The UK has yet to trigger Article 50, after which the process of it leaving the EU officially gets underway. Zenith, which warned of the impact on UK ad spend ahead of the referendum, now forecasts 5.4% growth in UK ad spend this year, down just 0.2% on its pre-referendum forecast.
It added, however, that most of the Brexit impact will come in the long term and depend on the result of trade talks with EU countries. It has lowered its 2017 forecast from 4% to 3.4%.
Zenith noted: “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 [in the UK]. This could lead to anything from disappointingly slow growth to outright recession.”