Media Planning and Buying Global Market Outlook

The global advertising market was valued at approximated $547 billion in 2016 and is growing at around 4 percent year-on-year

Media planning and buying contributes to 65 percent of the market size, which was approximately $355 billion in 2016
The strength of digital spend continues to be the key driver of growth in the global advertising market and is forecasted to grow to $161 billion by 2017 Regions such as Europe and North America and certain parts of APAC such as Japan have high market maturity due to innovation and adoption of advanced technologies such as programmatic buying and real-time bidding.

Media Planning and Buying Global Market Maturity

North America and Europe have higher concentration of network agencies, so buyers can have one or several centralized contracts covering geographies 

  • In APAC, large buyers are increasing their footprints fuelled by its massive consumer base and adoption of technology

Media Planning and Buying Industry Trends 

shift of media budget from traditional to nontraditional media channels, increasing focus on emerging regions and cross-screen planning are witnessed as the major trends in the industry. Advertisers are moving their budgets from traditional to digital channels, which enhances their brand and target reach

Media Planning and Buying Industry Supply Market Outlook

  • Global suppliers have expanded their base and have operational offices in emerging regions due to increasing demand for services 
  • Service providers continue to invest in technology and infrastructure to improve their service capabilities and service quality

Shift to Digital Advertising

  • Media agencies have increased their digital media planning and buying capabilities 
  • Top players like WPP and Publicis have increased their digital capabilities by acquiring niche players in the market. For example, WPP has acquired a majority stake in Essence Digital Limited, a global digital agency and the world's largest independent buyer of digital media

 

Suppliers: The media industry is highly mature due to the presence of well-established players. Agencies provide bundled media services with improved quality and technological capabilities.

Suppliers: Most of the global media agencies have widespread presence in the APAC region and encounter competition from local media agencies that dominate the market.Post the exit from the EU, the UK is expected to see a rise in wage rates. The rise in wage rates was a major social plank during the referendum 
Salaries account for close to 40 percent of supplier cost structure for key agency services such as media services.A rise in wage rates would directly impact supplier costs, which could in turn lead to a rise in prices. Clients need to look at price absorption clauses to shield them from any potential rise in prices

Major agencies in areas such as media and PR have their regional headquarters in London, which is used as a hub to access other EU markets.Post the UK’s exit from the EU, these agencies would look at setting up additional hubs in EU markets. This would lead to increases in operational costs, costs associated with setting up operations apart from legal and taxation costs

Post the exit from the EU, the UK is expected to see a rise in wage rates. The rise in wage rates was a major social plank during the referendum 

  • Salaries account for close to 40 percent of supplier cost structure for key agency services such as media services
  • A rise in wage rates would directly impact supplier costs, which could in turn lead to a rise in prices.Clients need to look at price absorption clauses to shield them from any potential rise in prices.

Digital channel is the established driver of global advertising, powered by the upsurge of online video (30–35 percent) and social media (28–30 percent) in 2016 Sources: igital channel is the established driver of global advertising, powered by the upsurge of online video (30–35 percent) and social media (28–30 percent) in 2016 Sources: 
Total digital ad spending will increase by 10–15 percent this year. Mobile continues to drive growth within the overall digital ad spending. More marketers will spend higher proportions of their advertising media budgets on mobile, with mobile video being part of the main growth.Fuelled by high-interest media events during the year, including the US presidential elections, Rio 2016 Olympics, Paralympics and the UEFA EURO 2016 championship, the positive outlook for 2016 is predicted to continue into 2017F

Several codes of advertising provide guidelines or norms that need to be followed while creating advertisements. For example, the CAP non-broadcast code in the UKhas rules that cover non-broadcast advertising (e.g., print, online), sales promotion and direct marketing