The coming year is going to be a year of big spending in the Advertising industry. Advertisers will increase their global ad expenditure by 4.3% in 2020, but the commercial audiences supplied by media owners will shrink by 1.6%, fuelling a 6.1% increase in media prices, according to Zenith’s Advertising Expenditure Forecasts.

Advertising expenditure has grown by 5.1% on average since 2010.However, traditional mass audiences are shrinking: first print, and now television in key markets. Many lost audiences are replacing television viewing with non-commercial video like Netflix, Amazon Prime Video, HBO, and eventually Disney+, reducing available audiences and creating fragmentation. The use of adblockers means that some audiences have low exposure to digital advertising. This rising demand and falling supply is increasing prices rapidly. The supply of commercial audiences has shrunk by 1.3% a year on average since 2010, according to exclusive Zenith research, while media inflation has averaged 6.5% a year.

“The days when we could find audiences all in one place are long gone. Now, however, technology empowers us to find them wherever they are, online or offline, and win back value for our clients through efficiency and effectiveness – by ensuring that we target and reach consumers with the right message at the right point in the consumer journey,” said Matt James, Global Brand President at Zenith.

Despite the trade dispute, the US and China are still leading global ad spend growth. The US ad market is forecast to grow by US$39.1bn between 2019 and 2022, while China grows by US$10.3bn. Together they will account for 56% of all growth in ad expenditure over the next three years. China’s growth rate is slowing, however, as its ad market matures. After years of being a production-led, high-growth economy, China is transitioning into a consumer-led developed economy, and its ad market is becoming more similar to other developed economies. Chinese ad spend is forecast to grow 4.1% in 2020, compared to 4.8% in the US.

The third-biggest contributor is India, which will grow by US$4.3bn between 2019 and 2022. Indian ad spend is steadily increasing by double-digit rates, with growth forecast at 12.4% in 2020, 12.9% in 2021 and 12.6% in 2022. The Indian ad market has great potential for long- term growth, contributing just 0.3% of GDP this year compared to 0.6% in China and 0.7% for the world as a whole. At current development rates, by the mid-2020s India will overtake China as the main source of growth in Asia Pacific, and the second-biggest in the world. The UK ad market will grow by 4.9% in 2020, up from 3.2% in 2019, driven primarily by very strong digital spending, which will be up 6.9% next year.