GroupM, WPP’s media investment group, has released its US Media Forecast Report, detailing growth in the advertising industry last year and making forecasts for the next two years.
Underlying growth in the overall US advertising industry, excluding political advertising, was 6% last year across digital media, television, newspapers, magazines, radio and outdoor media.
GroupM is forecasting 5.8% growth in 2019, only slightly slower than 2018 levels, aided by a still strong economy and some underlying inflation, and 4.8% in 2020.
Including political advertising, advertising spend grew 9.5% in 2018.
GroupM says extreme variation in growth rates has become the norm in the US advertising industry, with political advertising causing mid-single-digit swings of growth and decline from year to year.
Political advertising accounted for a record $US9 billion in spending last year, with another half-percentage point of activity due to incremental spending on the Olympics.
And excluding political advertising:
In Australia, political advertising peaked this year with a federal election and a NSW state poll. Clive Palmer's UAP reportedly spent more than $60 million. Numbers by Nielsen show Labout spent $10.7 million and the Liberals almost $10 million.
In the US, digital advertising grew 23% in 2018. GroupM's forecasts show digital spending up 15% in 2019 and 16% the following year.
As with other media, political advertising has become increasingly important to digital, amounting to about $US2 billion in 2018, or around 2% of the medium’s total.
"Television continues to face challenges as media owners navigate the relative weakness of the marketers who represent the bulk of the medium’s revenues," GroupM says.
Excluding political advertising, television grew by 0.7% in 2018 but is likely to be down 0.2% in 2019 and down 2.3% in 2020.
Including political advertising, the television grew 6% in 2018. GroupM forecasts a 5.4% fall in 2019 but 3.6% growth in 2020.
"Political advertising skews television growth rates in extreme ways," GroupM says. "However, political advertising has a meaningful impact, especially at the local level of television."
GroupM expects modest growth for outdoor advertising in 2019 and 2020 and modest declines for radio.
"We also anticipate sustained declines for print media into the future," GroupM says.
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