Soccer World Cup expected to ad US $500 million to Latam Ad Expenditures
What: Global ad spend will increase by 5.6% at current prices in 2014, according to Warc. ZenithOptimedia, however, predicted a 5.4% growth rate for 2014.The FIFA World Cup is one of the main drivers of global ad spend during 2014.
Why it matters: The FIFA World Cup will boost global ad spend approximately by US $1.5bn this year, especially in Latin America, where it may add US $500m.
This means the highest annual rate of growth since 2010, after the recession.
This optimistic outlook comes mainly from improved trading conditions, better economic stability and the enthusiasm about major sporting events such as the FIFA World Cup.
According to Warc´s forecast, Adspend will grow the most in India at 14% (5.6% adjusted for inflation) followed by Brazil with 12.4% (6%), China at 12.3% (9.5%) and Russia with 8.6% (2.2%).In more established markets like UK and the US will grow at 5.8% (3.8% adjusted for inflation) and at 5.6% (3.8%) respectively. By 2015, Warc expects that out of these 12 markets that will show growth in adspend at current prices, India will increase its adspend at the fastest rate of 13.5%.
"This year is set to record the highest annual rate of growth since 2010.This is largely because the outlook for the global economy is now stabilizing and advertisers are starting to feel confident about making additional investments," said Suzy Young, data and journals director at Warc.
However, ZenithOptimedia didn’t make such an optimistic prediction. Though slightly low, it predicted a 5.5% growth for 2014,but a more positive future with growth of 5.7% in 2015 and 6.1% in 2016,according to its´ latest Advertising Expenditure Forecasts.
World cup's impact
Following ZenithOptimedia report, the FIFA World Cup will boost global ad spend approximately by US $1.5bn this year. Especially in Latin America, the FIFA World Cup may add around US $500m to the region ad market.
Advertising spending will probably benefit TV the most, although budgets will also be directed to internet advertising, especially social media. Still, Mobile, boosted by the rapid adoption of smartphones and tablets, is projected to be the main driver of ad spend, growing 5.5 times faster than desktop internet.
“The World Cup is a great opportunity for advertisers to reach passionate and involved audiences worldwide. While television will remain central to how fans experience the competition, advertisers are using digital media more than ever before to help shape this experience,” said Steve King, worldwide chief executive of ZenithOptimedia.