Global spending on entertainment and media (E&M) increased by 4.9% in 2011, slightly more rapid than 2010’s 4.5% growth, but representing a lower rate than in previous years, according to a June 2012 report from PricewaterhouseCoopers (PwC). Internet advertising saw the fastest growth, of 18.7%, followed by TV subscriptions and license fees (excluding video-on-demand, pay-per-view, and over-the-top), which grew by 7.2%. Other traditional media, such as out-of-home (OOH) advertising and TV advertising, also showed solid growth, at 5% and 3.2%, respectively. Recorded music – excluding concerts and music festivals – declined by 2.4%. Consumer and educational publishing (-1.3%), consumer magazine publishing (-0.8%), and newspaper publishing (-0.7%) all also experienced a slowdown in spending.
Video Game Ad Spending to Jump
Although internet advertising will see the highest compound annual growth rate (CAGR) from 2012 through 2016, at a projected 15.9%, video game ads will also post a significant CAGR of 11.2%, according to the report. There is then a significant drop-off to the next tier of advertising media by CAGR: TV (6.6%), cinema (5.3%), OOH (5%), and radio (3.8%).
Total ad spending on E&M will increase by a CAGR of 6.4%, with directories (0.4%), newspapers (1.6%), consumer magazines (3.4%) and trade magazines (3.4%) posting the slowest growth.
Digital Share of Spend Keeps Ticking
Meanwhile, digital accounted for 28% share of E&M spending in 2011, up 3% points from 25% a year earlier. This rise in share was due to a 17.6% rise in digital spending, compared to a marginal 0.6% increase in non-digital spending. PwC expects this trend to continue, projecting a 12.1% CAGR for digital spending over the next 5 years, compared to 2.8% for non-digital. As a result, by 2016, digital’s share of E&M spend is expected to reach 37.5% in 2016.
Digital spending consists of: broadband and mobile Internet access; online and mobile Internet advertising; mobile TV subscriptions; digital music; electronic home video; online and wireless video games; digital consumer magazine circulation spending; digital newspaper circulation spending; digital trade magazine circulation spending; electronic consumer, educational, and professional books; and satellite radio subscriptions.
US Largest E&M Market; China to Grow Fastest
Further data from the report indicates that the US is by far the largest E&M market, at $463.86 billion in 2011. Japan is the next-largest country by E&M spend, at $192.8 billion, followed by China ($109.06 billion), Germany ($99.34 billion) and the UK ($85.23 billion).
Looking at projected CAGR from 2012 through 2016, China is projected to grow fastest, with a 12% CAGR, followed by the Middle East/North Africa (11.4%) and Brazil (10.6%). The expected CAGR for the US stands at 5.2%.
US Also Leading Ad Market
The report also identifies the US as the leading advertising market, with a value of $172.03 billion in 2011. Japan ($48.75 billion) and China ($36.17 billion) are next, with Germany and the UK rounding out the top 5. On the strength of a 14.6% CAGR from 2012 through 2016, though, China will overtake Japan in advertising market value. The UK will also surpass Germany to be the 4th largest market.
Both Russia and India will post double-digit advertising spending CAGR of 13.1%.