Will Ad Spending Really Be ‘Sluggish’ in 2016?

I was surprised as anyone to see reports last month from GroupM that ad spending may only muster modest growth of 4.5 percent in 2016 — after 4.3 percent growth this year. I’m not an economist, but it’s hard to fathom that that’s all we can expect. But then again…

Image: Shutterstock
Image: Shutterstock

I was surprised as anyone to see reports last month from GroupM that ad spending may only muster modest growth of 4.5 percent in 2016 — after 4.3 percent growth this year. I’m not an economist, but it’s hard to fathom that that’s all we can expect. But then again…

Usually, years of Presidential Elections and Summer Olympics are boon years for advertising, certainly here in the U.S. Taken together with continued U.S. economic growth and China stabilization, if ad spending is only going to grow this slowly, one must ask what’s holding it back?

According to the report, television advertising in the U.S. is competitive — meaning there’s softness in the market. This is primarily because eyeballs are migrating to digital, video streaming and mobile devices, at the expense of television — eMarketer records more than 5 hours of a day spent on digital channels, and just four hours on TV. Globally, however, TV is resilient in strength.

GroupM also reported that 90 percent of ad spending growth is in digital – which now comprises 30 percent of global ad spend, compared to 19 percent in print media.

Perhaps, sluggish may be the new normal — as media shifts continue to flow in fits and starts. 2016, with all the traditional bolsters for U.S. ad spending in place, should really show if there is indeed a less bullish norm.

In two weeks, before the Direct Marketing Club of New York, The Winterberry Group will present its forecast for U.S. media spending – including general, direct marketing and, within direct, digital media spending. I’ll be there taking notes!