A new report from Magna Global forecasts worldwide ad growth will slow this year, with TV sales predicted to drop for the first time since 2009. In its closely watched forecast, Magna said total global ad spending would reach $505 billion in 2017, a 3.7% gain. U.S. ad sales will face a slowdown to 1.6% growth this year, compared to a record 7.7% growth in 2016, according to Magna.
Globally, there will be “a noticeable drop compared to 2016, which reached a record 5.9% growth rate," Magna said. “The lack of cyclical events (presidential election, Olympics) in 2017 and the U.S. market itself, are contributing the bulk of the global slowdown.”
In its report, Magna said that digital media has now surpassed linear television to become the number-one ad revenue category. According to Magna, digital will grow by 14% in 2017 to $204 billion. “Within digital, the majority of advertising sales (54%) is now generated by impressions and clicks on mobile devices,” the firm said. “Video and social formats will continue to drive digital advertising growth (30% or more) while paid search will grow double digit again (13%).”
Meanwhile, Magna forecasts that global TV ad sales will slip 1% to $180 billion. In the U.S., Magna projects national TV ad revenue will decline by 3% to $43 billion this year.
As digital grows and TV stalls, ASI research showed promotional product sales in 2016 reached a record $22.9 billion and distributors aren’t expecting a slowdown this year. In the first quarter of 2017, distributor sales were up 3.3% versus Q1 of the prior year. The Counselor Confidence Index, which gauges the health and optimism of distributors, reached its highest rating ever at 116 in Q1 of 2017. The growth of the Counselor Confidence Index reflects a general sense of optimism among distributors as they plan for the remainder of this year and into 2018. More than half of distributors (55%) are predicting a year-over-year increase in sales overall for 2017.