In Switzerland, advertising revenues will remain unchanged in 2019 - in contrast to the global market
The latest Magna report forecasts that advertising revenue will rise in 2019 for the tenth consecutive year, reaching the $600 billion mark. Linear advertising revenue is down 3 percent, while digital advertising revenue is up 14 percent. In Switzerland, however, advertising revenue remains unchanged. In the United States, the first few months of 2019 have seen a slowdown in digital growth.
In its latest report on trends in the global advertising market, Magna forecasts that media owners' advertising revenue will increase by five percent in 2019. This means that global advertising revenue will reach almost 600 billion dollars. As expected, global market growth is slowing compared to the record growth of 2018 (+8%), which is mainly due to the absence of important cyclical events (US elections, FIFA World Cup). If the cyclical events in both years are neutralized, global growth would be plus seven percent last year and plus six percent this year.
The lack of major cyclical events is impacting editorial media types (TV, print, radio, out-of-home, digital display, banner and video), which traditionally benefit the most. Revenues from editorial ads are stagnating this year at 366 billion dollars, while direct digital ad revenues, including search and social formats, are growing by plus 15 percent.
Revenue from television advertising will fall by minus two percent this year, while revenue from print advertising will fall by minus ten percent and radio by minus one percent. OOH will continue to outperform traditional media: up five percent. Social media will be the fastest growing digital format in 2019 (+23%), ahead of video (+22%) and search (+13%).
An increase in global advertising expenditure has been observed for ten years in a row (2010-2019). Magna forecasts higher growth for 2020 (linear -0.6%, digital +11%, total +5.4%).
Swiss advertising revenues remained flat (+0.5%) at CHF 4.1 billion (USD 4.2 billion) in 2019, following slight declines (-1%) in 2018. Switzerland has one of the highest advertising spend rates per capita in the world (USD 493 compared to a Western European average of USD 252) and some of the highest media costs in the region: USD 91 is the typical CPM for a 30-second spot on free TV, well above the regional average of USD 18; the French-speaking region, which includes Geneva and Lausanne, tends to have higher rates than the German- and Italian-speaking regions.
Digital advertising formats saw the strongest growth in 2019 (+11%), followed by TV (+6%) and OOH (+1%). Print is still a fairly large part of the media mix. Compared to the Western European average (30% vs. 16%), however, it continues to decline, as advertising money is shifting to digital media, among other things. Social (+22%) and digital video (+17%) are the fastest growing formats within digital media, while search (+7%), which already accounts for a quarter of digital ad spend, is gradually losing momentum. Magna expects digital video and social to continue to gain market share at the expense of search and display over the next five years, reaching almost CHF 950 million, 60 percent of digital NAR.
The elections in October 2019 are unlikely to be a major driver of advertising expenditure. Political advertising is not permitted on television, although parties are allowed to advertise in all other formats with some restrictions. Newspapers may refuse to run political ads, and political ads may not be placed along highways and other major roads.
Magna is the central resource of IPG Mediabrands, developing intelligence, investment and innovation strategies for agency teams and clients. IPG Mediabrands brings together 10,500 marketing communications, media and technology specialists in over 130 countries.
