Q3/2015
View R3 is a leader in global, regional and local consulting on improving the effectiveness and efficiency of marketers and their agencies. We work with nine of the world’s top twenty marketers including Coca-Cola, Unilever, AB InBev, MasterCard, Mercedes Benz, Johnson & Johnson, Samsung and Kimberly Clark.
Welcome to the R3 Q3 2015 Update, our regular quarterly report on the marketing communications industry. In this issue, we look at the big stories in the industry, the initial quarterly earnings of the holding companies, along with recent pitches, M&A’s and New Business Results.
The Biggest Stories The big news from this quarter is the predicted contraction in the global advertising spend growth rate, which will decrease from 4.2% to just 4%. For the first time in nine years, North America, Western Europe and Japan will lead global growth as contracting economies in emerging markets are the driving factor bringing down global growth expectations. China in particular, with its slowing economy and currency devaluation, has caused agencies to revise earlier growth predications from 5.2% to 4.1% for the APAC region. There has been a lot of buzz this quarter in regards to China’s “new normal” of economic challenges, currency devaluation, and the government’s war on corruption. This highlights just how much China’s burgeoning marketing industry effects the region as a whole, as other Asian countries are on track for double digit growth, with India and Vietnam at 11% and Philippines at 10%. ZenithOptimedia also predicted a significant contraction in emerging markets’ ad spends in 2015, but noted they will again lead market growth in 2016. The report also highlighted the rise of mobile, which will account for 12.4% percent of global spends this year, while display is set to lose market share for the first time ever. Carat’s numbers shed more light on the growth of mobile in China specifically, where they predict 56% growth. On the mobile front, the debate over ad blocking is at an all-time high, sparked by the release of the iPhone 6S and its incorporation of software
NEW YORK 4th floor 57 W 57th Street, New York, NY T +1 646 416 8088 Taleah Mona Lusky – Senior Consultant taleah@rthree.com Mike Goodnough – Senior Consultant mike@rthree.com Talia Tay – Consultant talia@rthree.com SHANGHAI Room 4203, United Plaza, 1468 NanJing Road West T +86 21 6212 2310 Greg Paull - Principal greg@rthree.com Erin Singleton - Consultant erin@rthree.com Trace Qu - Researcher trace@rthree.com BEIJING A 1801, Chaowai SOHO, No.6 B Chaowai Street, Chaoyang District, Beijing T +86 10 5900 4733 Sabrina Lee - Managing Director sabrina@rthree.com Lisa He - Consultant lisa@rthree.com SINGAPORE 69A Tras Street, Singapore 079008 T +65 6221 1245 ShuFen Goh - Principal shufen@rthree.com Seema Punwani - Principal Consultant seema@rthree.com Herbert Ho - Regional Business Director herbert@rthree.com LONDON 77 Beak Street London, W1F9DB T +44 20 7993 6009 Jeremy Nathan - Senior Consultant jeremy@rthree.com
1