Canada to fall out of top 10 ad-spend markets by 2019: report

While ad spend will increase over the next three years, increases will be subtle, with digital and out-of-home advertising being the only areas of spend increase, according to Zenith.

The latest ad spend forecast by Zenith shows that Canada will likely not be among the top contributors to spending growth over the next three years — and that by 2019, Indonesia will overtake Canada as the 10th biggest spender on advertising.

Zenith’s latest numbers, released March 27, show that for year-end 2016, Canada spent an estimated $9.05 billion US on advertising ($11.58 billion Canadian), placing it 10th overall globally. But by 2019, it predicts that Canada’s growth in ad spend will only rise slightly to $9.59 billion US ($12.26 billion Canadian).

But Canada’s growth in ad spend is indeed rising — albeit very subtly. The year-over-year growth rate for 2016 versus 2015 sits at 1.4%, as does the predicted rate for 2017 versus 2016. In 2018, that rate will grow to 2.2%, and in 2019 will rise slightly to 2.3%.

The next three years

Most advertising media in Canada are expected to see a decrease in ad spend over the next three years, with only out-of-home and online advertising seeing gains.

  • Newspapers will see the biggest drop, with a decrease of just over 27% from $1.02 billion to $741 million;
  • Magazine ad spend will decrease by 15%, from $370 million to $315 million;
  • Television will decrease less drastically with a 7% drop from $2.99 billion to $2.78 billion;
  • Radio will fall 1.5% from $1.56 billion to $1.54 billion;
  • Out-of-home media is projected to see a modest increase, up 3.9% from $563 million to $585 million; and
  • Online advertising will rise 24%, from $5.1 billion to $6.3 billion.

Projections in online advertising show classified advertising will see a modest decrease over the years, while direct e-mail advertising will remain essentially unchanged. Small increases will be seen in search and display, and in the general category of desktop-optimized ads. The biggest increases over the years will be seen in digital video (spend is expected to increase by 58% over the next three years, hitting $672 million by 2019) and the general mobile category (increasing by 50% to $2.93 billion).

Currently Canada’s share of digital ad spend is well ahead of the global average. According to Zenith, in 2016, combined desktop and mobile ad spend represents 34.1% of the global advertising market. In Canada, that number lies at 43.8%. The country’s share of radio advertising is also twice as high as the global average, at 13.5% (global sits at 6.4%). Where Canada currently lags behind is in television (the country’s share is at 25.8% while the global share is at 35.8%), also slightly under-indexing on magazines and OOH.

By 2019, Canada’s breakdown of ad spend will look a little more similar to the global average, but it will still over-index in its share of digital ad spend (with 51.4% of its ad dollars going to digital, while the global average sits at 41.7%), and the share for television advertising (22%) will still sit at 10% below the global average.

Zenith looked into various studies on the local market when crafting the report, examining data from Audience Insights, the CRTC, Numeris, Nielsen and more. According to Audience Insights, radio listening has decreased modestly over the years, but online audio streaming services such as Spotify and Apple Music have not taken as big a bite out of radio audiences as one might have expected. It also says radio tuning in cars will remain strong.

It found that fall TV audiences were down 5% in Canada this past year, and that the top five cable distributors saw a decrease in 157,000 subscribers in the first three quarters of 2016.

Globally, the U.S., China, Japan, U.K. and Germany will remain the first through fifth highest spenders on advertising from 2016 to 2019. The U.S.’s ad spend total is predicted to reach as high as $211 billion at the end of that period.