Dear ad spend forecasts, happy birthday

We all (presumably) love the fast-paced nature of our industry, otherwise we would have left a long time ago. As has been discussed at length, particularly over the last decade, this continuous need to innovate has resulted in some truly game changing actions, transforming consumer behaviour and life as we know it.

However, in and amongst this rollercoaster of change, every now and then it’s good to take a moment to look back, as well as forward. At Zenith, in 2017 we are celebrating the 30^th continuous year of our Advertising Expenditure forecasts – as good a reason as we’ll ever have to take that coveted step back.

To give some context, I’ll start at the beginning. The first ad spend forecast was released in Autumn 1987, with the aim of proving the scale of the industry across the world; there was a feeling that it wasn’t being taken seriously by the financial markets. These were the first global forecasts and the first agency forecasts in the UK, so really made waves.

We were dealing with a much smaller global ad market; we estimated it at $187bn, only a third of its current value. The US was extremely dominant, accounting for 59% of total spend – this sits at 35% today.

Looking back over the reports really shows how the shape of the industry has changed. Back in 1987, there was no competition in the TV industry, the newspaper industry was vast and hugely influential up and down the UK, and of course, there was no internet forecast – the birth of internet advertising was still seven years in the future and the first forecast didn’t come until 2002.

That year, we estimated internet ad spend at £162m, which ended up being a slight overestimate – it was £142m. Then came the real digital juggernaut – our predicted rise to £246m in 2005 looks naïve now, with the actual figure reaching £1,162m. It’s safe to say that we, along with pretty much everyone else, underestimated the growth potential of internet advertising, although we were occasionally accused of over exaggerating it. It’s hard to overplay the significance of those years in the noughties, but it’s testament to the ad spend forecasts that we’re able to look back with such accuracy. And some things never change – we were looking forward to a boost from the 1988 Olympics and US elections, expected rapid growth in Asia Pacific outside Japan, and worried about economic problems in Latin America.

So how have different mediums fared over the last 30 years? Here are the headline numbers…

* first figure for 1997

We can see from these that radio, TV and outdoor are the mediums with the most consistency – all in growth, but steadily. Cinema, along with (not surprisingly) internet advertising, is the one jumping ahead, whilst newspapers and magazines have significantly reduced ad spend.

As we look ahead to the next 30 years, it really is hard to say what we’ll be talking about as we celebrate the ad spend forecasts’ 60^th anniversary. As an industry we have challenges, but we’re also in a good place – the latest report confirmed an expected global growth of 4% this year. One thing is for sure though, the rollercoaster of change will continue, and I for one can’t wait. Happy birthday Advertising Expenditure Forecasts!