But Magna predicts global ad spend will slow next year due to political uncertainty around Donald Trump’s presidency and Brexit, as well as a lack of tentpole events. North America saw its strongest growth rate in 12 years in 2016 at 6.7%, but Magna says next year will be its most significant slowdown in 15 years at just 3.6% growth.
GroupM predicts global ad spend will slow to 4.4% growth in 2017.
Despite digital cannibalization, TV grew 4% to $186 billion this year thanks to tentpole events like the Olympics and the US election, Magna reported.
And major CPG brands like Procter & Gamble reallocated budgets for broad reach after experiencing poor results from digital’s “overtargeting,” noted both Magna and GroupM. No digital alternative can offer the mass reach of TV yet.
As increasing demand for linear TV inventory met a shrinking pool of supply this year, pricing inflation of 8-10% helped pad broadcast budgets, Letang said.
“A lot of mainstream brands feel like they absolutely need what’s left of the reach,” he said. “So far, and I insist on so far, they have been ready to take on significant inflation. In the long term, the [digital] alternatives will become more substitutable and the demand for TV will reduce.”
Magna said 2016 represents a “tipping point in media consumption.” Olympic viewership was down 33% for adults 18-49. Award ceremonies and NFL games also had viewership declines.
UPDATE: Zenith, which also released its ad spend forecast on Monday, is seeing similar trends in ad spend growth.