Magna Global, GroupM and Zenith forecast lower to flat sales growth with more sales dollars working in digital for 2017. Magna Global attributes slower growth to current economic and political insecurity as well as the lack of a major recurring event (i.e. Presidential election or the Olympics). GroupM adds that slower growth rates are due to energy pricing as well as political concerns.

Magna Global also reports that next year’s growth rate would be the lowest in 15 years excluding the recession in 2008-2009. Even with slow growth rate All three agencies presented this week at the USB Media and Communication Conference. While the analyses and forecasts, they provide insight into the factors at hand impacting the global and local advertising marketplace.

Key highlights from each of the agency’s forecasts:

Magna Global predicts overall ad growth for the global marketplace is 3.6%, reaching $510.7 billion, compared to this year’s growth rate of 5.7% pace, reaching $493 billion.

• S. growth is expected to align with global slowing to 3.6%. This year U.S. advertising sales grew by close to 7% to $180 billion, it’s strongest growth in 12 years. Discounting political and Olympic spending ($3.5 billion), ad growth for 2016 would have been 5.1%.

• Digital ad sales will lead the marketplace with market share of 40% ($202 billion), compared to linear TV ad sales ($186 billion, 36%). Digital will continue to grow to win 50% of the market by 2021 ($299 billion) while linear TV will level off at $195 billion (33%).
• Digital ad sales (52% share) will be comprised mostly of mobile, driven by usage of mobile devices.
• Digital growth this year was also driven by video formats (+35%) and social formats (+43%), while search banner ad sales declined (-5%).
• Google and Facebook, will continue to dominate search and social, controlling more than half (54%) of the total digital advertising market compared to 44% a year ago.

GroupM forecasts overall ad growth for the global market at 4.4% to $547.3 billion in 2017, close to growth rate of 2016 at 4.3% ($424.5 billion).

• S. will continue to trail the global pace at 2.6% growth ($193.6 billion) in 2017 from the 3.1% growth ($188.7 billion) forecasted this year.
• Digital advertising will capture 72 cents of every new ad dollar and TV 21 cents in 2017, growing from 77 cents and 17 cents, respectively, this year.

Zenith forecasts the growth at 4.4% (reaching $566 billion), flat compared to 2016.

• S. ad spending will grow to 4.3% (close to $190.8 billion) from 3.5% ($182.6 billion) in 2016.
• Social media’s increased usage will account for 20% of all Internet advertising in 2019, up from 16% in 2016.
• Mobile advertising growth slowed down to 48% in 2016 compared to 94% growth in 2015 and will grow an average of 26% each year between 2016 and 2019
• While television still dominants the ad market, accounting for 36% of total ad spend in 2016, the Internet is expected to overtake television to become the largest advertising medium in 2017.
• Desktop Internet advertising will continue to decrease at an average rate of 4% per year as advertisers follow consumers to mobile.

All three agencies still see television as an important channel for branding. Online video can also be a good branding vehicle but it doesn’t yet have the massive or broad reach of television.  The agencies also agree that print’s (newspapers and magazine) share of global spend will continue to decline year to year. Zenith forecasts the rate of decline at 4% to 5% each year between 2016 and 2019.