Google, Facebook Propel Jump in Global Ad-Spending Forecast

By Alexandra Bruell

The backlash against Google and Facebook from some big marketers isn't denting their ad business.

Magna, a division of Interpublic Group of Companies, predicts global ad revenue will increase 6.4% to $551 billion this year, up from an earlier projection of 5.2% growth, including ad spending on cyclical events like the Olympics. The reason for the adjustment is the growth of the digital ad titans.

While some brands have pulled back in spending on Google and Facebook due to issues that range from brand safety to performance challenges, ad buys from small and local businesses are more than making up for the cuts, said Vincent Letang, executive vice president of global market intelligence at Magna.

"The thing really that we revise up for is digital," Mr. Letang said. Growth from small and local businesses was "bigger than we thought."

Digital accounts for nearly half of the projected 2018 growth, the company said. Global digital advertising sales, including display, video, search and social, will grow 16% this year to $250 billion, slowing slightly from 18% growth in 2017, Magna predicts. More than 60% of digital ad sales is currently generated by impressions and clicks on mobile devices, the company said.

In the company's last global forecast, released in December, Magna predicted digital growth of 13%.

Facebook and Google collectively grew revenue 31%, Mr. Letang said. "That's pretty amazing."

In the U.S., total ad sales will grow by 6.4% in 2018 to $207 billion, including $4 billion of revenues from large global events. The company previously projected 5.5% growth for the U.S. market.

Traditional television ad revenues will likely be flat this year, not including revenue from major special events, reflecting ratings challenges that have only been partially offset by higher prices, according to the report.

Write to Alexandra Bruell at alexandra.bruell@wsj.com

(END) Dow Jones Newswires

June 18, 2018 01:44 ET (05:44 GMT)

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