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MAGNA: Latin American Advertising Market to Grow by 7.3% in 2019

MAGNA has released its summer 2019 update of advertising forecasts, which predict the Latin American advertising market to grow by +7.3% this year. Global market growth is slowing down compared to the record growth recorded in 2018 (+8%), mostly due to the lack of major cyclical events in 2019.

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What: MAGNA has released its summer 2019 update of advertising forecasts, which predict the Latin American advertising market to grow by +7.3% this year.
Why it matters: Global market growth is slowing down compared to the record growth recorded in 2018 (+8%), mostly due to the lack of major cyclical events in 2019.

 

According to the latest MAGNA report, global advertising revenues are forecast to grow by +5% to reach US $600 billion in 2019. This is 3% less than 2018 growth, a difference that is due to the absence of major cyclical events this year. As the report mentions, this lack of cyclical events will affect editorial media that generally benefit from them, such as TV, print, radio, video, etc. Magna predicts editorial ad revenues to stagnate at US $366 billion this year, while direct digital ad sales, including search and social formats, will grow by +15%.

“Global ad spend continues to grow as the economy remains strong in key markets but two factors are slowing down the growth rates in 2019: one is cyclical (the lack of major events in 2019, following a record year in 2018) while the other is structural,” said Vincent Létang, EVP, Global Market Intelligence at MAGNA, and author of the report. “Digital ad formats now account for more than half of total advertising sales. However, product innovation (smart homes, cloud services, OTT, 5G) and marketing innovation (direct-to-consumer brands) will continue to drive ad spend growth this year and the next.”

Among the key predictions in the report, MAGNA forecasts ad spend will grow in all key markets this year, television ad revenues will shrink by -2%, print ad sales will decline by -10% and radio by -1%. Also, OOH will continue to outperform traditional media, and social media will be the fastest-growing digital format in 2019 (+23%) ahead of video (+22%), and search (+13%).

Also, MAGNA predicts that digital advertising revenues will grow by +14% this year, to reach US $304 billion, more than half of the total global advertising economy (51%). In 2020, digital advertising will grow by double digits again. The report points out that digital advertising growth has slowed down compared to the previous four years, which had been expected because digital media penetration is now near universal in many markets. However, growth remains strong: MAGNA anticipates search ad sales to grow by +13% this year, while social ad sales will grow by +23% and digital video by +22%.

Moreover, MAGNA’s report states that the fastest-growing markets will be Argentina and the Ukraine (both +22%) where ad spend is driven by hyper-inflation. Other emerging markets that will grow around doublé digits or more are India (+15%), Egypt (+19%), Vietnam (+11%), and Brazil (+9%). Asia Pacific and Latin America will be the fastest growing regions (+7.4% and +7.3% respectively).

For 2020, MAGNA forecasts global advertising to grow yet again, for the eleventh consecutive year. Linear ad revenues will reportedly stabilize while digital ad sales will grow by +11%. Total advertising sales will reach US $627 billion thanks to the return of events like the Summer Olympics, the U.S. Presidential elections, and the European Football Championship.

 

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