Global Media, Digital Ad Spending Climbs Around the World

Global Media, Digital Ad Spending Climbs Around the WorldAccording to a new McKinsey report, global spending on media should rise at a compound annual rate of 5.1 percent during the next five years — to about $2.1 trillion in 2019 from $1.6 trillion in 2014.

“Yet this growth actually reflects a general slowdown, according to our study of consumer- and ad-spending data in every global media and entertainment sector,” notes the report. “Although total expenditures on media rose by 5.4 percent in 2014, compared with 5.2 percent in 2013, the increase in both years was lower than the 6.2 percent compound annual rate recorded between 2009 and 2012.”

The fastest growing category? Digital, naturally.

Digital advertising was the fastest-growing category in 2014, with a 16.1 percent increase in spending, followed by video games at 14.3 percent, and broadband at 9.2 percent.

“Both digital advertising and broadband are entirely digital, and digital components fueled the growth of spending on video games. At the other end of the growth spectrum, expenditures for traditional nondigital media, such as consumer magazines and newspapers, continued to decline,” McKinsey noted.

The research firm noted two primary drivers of spending on media: the shift to digital and developing markets.

“Increasingly, developing markets play a critical role in the growth of spending on global media,” according to the report. “That’s true not only because traditional media remain strong in these regions but also because the markets, from Mexico and China to India and Malaysia, anticipate healthy economic expansion and higher household incomes. In fact, the Asia–Pacific media market will be the largest source of absolute growth for the global industry during the next five years.”

You can read more of the report and see the charts here.