Global growth is forecast at 3.8% in 2019, amounting to US$625 billion, reflecting a relatively benign economic environment and continued broad-based recovery. The pace of ad spend growth is decelerating from 4.1% in 2018. In 32 out of the 59 markets included in our forecasts, growth is forecast to slowdown in 2019, but globally growth will likely accelerate to 4.3% in 2020.
One driver will be the Swiss advertising market, we expect it to continue to grow by 7.1% in 2019. As in the previous year, this growth will be mainly driven by digital ad spend in various categories which outweighs the losses in traditional media categories like print and radio. We also expect growth in ad spend for Cinema and OOH as the past years showed positive effects mainly due to ad product innovations and a dynamic market environment within both sectors.
Especially, the OOH market in Switzerland stays very dynamic. Through the acquisition by Tamedia Neo Advertising, a OOH provider that traditionally had a strong inventory in the French-speaking part of Switzerland, started to contest the duopoly of Clear Channel and APG also in the German part of Switzerland. Furthermore, the digital OOH networks of all providers are continually being expanded, resulting in a bigger inventory and larger ad spend. We expect this trend to continue, but with slightly decreasing growth rates overall. Furthermore, we expect a higher level of OOH spending in 2019, as national parliament elections are going to take place that year.
Programmatic advertising in Switzerland has been heavily impacted by the ad-fraud and ad-quality debate of the last years. While originally the programmatic dogma stated that the advertising environment was mostly secondary to reaching the right person, clients and agencies developed a stronger conscience for the quality of delivered ad impressions. This process has also been driven by 3rd party technology providers, that provided more transparency about ad-delivery. In the case of programmatic, this process resulted in ad spend being shifted from open exchanges to private deals, improving control of ad environments by advertisers. While this reduced the immediate amount of relevant programmatic ad inventory, the improved level of quality ensures that client trust into programmatic advertising remains intact and share of online advertising is continually rising.
While the Swiss video advertising market hasn’t yet arrived at the same spend levels as in other markets, it still shows strong dynamics. The efforts of YouTube and the big social media platforms to enhance attention and time of engagement for their video content show relevant effects.
New advertising formats cater to the situation of consumption on mobile devices and advertisers begin to deliver an awareness towards the necessity of custom video creatives for online video campaigns. This results in high growth rates for online video spend, that we expect to continue in the future.
In case of programmatic video, demand actually exceeds supply. Providers still receive very good prices on IO orders, leading to a shortage in actual programmatic video inventory.