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Global Marketing Index

Released: August 28, 2015

Marketing budgets rise globally, but new media earthquake intensifies

  • Global Digital and Mobile spend continues to grow rapidly.
  • TV budget share shows signs of persistent declines, especially in the Americas
  • Rising Budgets support payroll growth

Overview
The Headline Global Marketing Index (GMI) for August registered a value of 55.1 little-changed from the previous month. This indicates that marketing activity is still growing steadily on a global level. Growth was recorded in all regions, with the headline GMI values for Europe, the Asia-Pacific region and the Americas at 56.4, 54.3 and 54.5 respectively. The aggregated America’s GMI value disguises two very different economic climates since North America, with a GMI of 60.9 shows very strong growth, while South American countries, are showing decreasing marketing activity, with a GMI of 42.0, below the 50.0 no-change figure. This contrasting climate is congruent with the findings of the World Economics SMI’s for the United States and Latin American economies. The United States is enjoying solid levels of economic growth whereas Latin America as a whole is now in recession.


Global Marketing Budgets
The Index value for Global Marketing Budgets was 52.2 in August, up marginally on the month before. This is the 30th consecutive month that the Index has recorded growth in resources panellists devoted to marketing.

Marketing Budgets by Medium
August data in all regions indicated that the revolution in the allocation of budgets by medium away from traditional media towards digital and mobile is continuing.

The share of Internet media (Digital and Mobile) in Marketing Budgets continued to expand rapidly in August. Digital advertising registered a high Index value of 73.8 globally. Mobile advertising registered an Index value of 71.0. The two media grew at very strong rates in all regions apart from South America where the Index value for Mobile of 45.2 indicates a fall in spending in the medium. Nevertheless, Digital still grew very strongly in the region with an Index value of 61.3 even when compared with a value of 71.5 in North America. At current rates of growth, Digital and Mobile should have the largest share of marketing budgets by 2016, after being close to zero at the Millennium.

Meanwhile, traditional media generally continued their decline in August. The allocation of marketing budgets assigned to TV recorded an index value of 45.3, below the 50.0 ‘no change’ level. This was the ninth consecutive month that the global TV index indicated a fall in spend of the medium. Expenditure allocated to TV fell in the Americas with an index value of 39.9, and of 29.0 in South America. The medium’s share of budgets also fell in the Asia-Pacific region where the index recorded a value of 45.3, but TV in Europe showed weak but steady growth continued with an Index value reported of 52.4.

The proportion of Global Marketing Budgets allocated to Out-of-Home (OOH), Radio and Press continued to slip in August as spending fell. Press registered an Index value of 32.5, globally showing negative growth with the pattern of decline being seen in all regions. The Index values for other traditional media, Radio and OOH, also indicated declining budget spend with values of 41.8 and 47.8 respectively. OOH in Europe and the Asia-Pacific region continued to stagnate with Index values of 49.6 and 50.4 The fall in spending on OOH was more evident in the Americas with an Index value at 43.3, unchanged on its value in July. Globally, Radio spending declined with an Index value of 43.6 and budget allocation to the medium fell across all regions.


Marketing Budgets by Region
Marketing Budgets expanded in all regions in August, with the highest rate of growth experienced in Europe, with an Index value of 54.5, up marginally on the month. The lowest rate of growth recorded was in the Americas with an Index value of 50.4, but there are great differences within the region. In North America, an Index value of 56.2 indicates strong growth in marketing expenditure, reflecting the expansionary impact of the US economy, the engine of the continent. In contrast, in South America, the largest economy, Brazil is experiencing recessionary conditions with the result that the Index value for the continent was 37.1, indicating falling expenditure on marketing. In the Asia-Pacific region the Index value recorded was 51.7, indicating weak growth.


Staffing Levels
The Staffing Index, which reflects the number of staff taken on compared to the same period last year, registered strong growth with an index reading of 56.7 in August. On a regional basis, the Staffing Index recorded values of 57.6 in Europe, 57.6 in the Americas, and 55.1 in the Asia-Pacific region.


Summary
World Economics Chief Executive Ed Jones commented on the release:

“The Headline Global Marketing Index for August indicated that marketing activity is expanding across the world in all regions at a solid pace, apart from South America. The revolution in media allocation caused by the rapid expansion of New Media marketing (Digital and Mobile), is still pushing traditional media budget share downwards as media budgets change shape.”



 

















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Methodology 
The Global Marketing Index results are calculated by taking the percentage of respondents that report that the activity has risen (“Increasing") and adding it to one-half of the percentage that report the activity has not changed (“Unchanged"). Using half of the “Unchanged" percentage effectively measures the bias toward a positive (above 50 points) or negative (below 50 points) index. As an example of calculating a diffusion index, if the response is 40% “Increasing," 40% “Unchanged," and 20% “Reducing," the Diffusion Index would be 60 points (40% + [0.50 x 40%]). A value of 50 indicates "no change" from the previous month.

The more distant the index is from the amount that would indicate "no change" (50 points), the greater the rate of change indicated. Therefore, an index value of 58 indicates a faster rate of increase than an index value of 53, and an index value of 40 indicates a faster rate of decrease than an index value of 45. A value of 100 indicates all respondents are reporting increased activity while 0 indicates that all respondents report decreased activity.

As of March 2015, all index values are based on a three month moving average to mitigate abnormal seasonal variations.



About the Global Marketing Index 
The World Economics Global Marketing Index (GMI) provides a unique monthly indicator of the state of the global marketing industry, by tracking current conditions among marketers.

Our global panel (2,000+ members) consists of experienced executives working for brand owners, media owners, creative and media agencies and other organisations serving the marketing industry. The panel has been carefully selected to reflect trends in the three main global regions: Americas, Asia Pacific and Europe.



About World Economics
World Economics is an organisation dedicated to producing analysis, insight and data relating to questions of importance in understanding the world economy. Its parent company Information Sciences Ltd has a long history of the development of key business information today used throughout the world, including the origination of the Purchasing Managers Indexes in Europe and Asia (now owned by Markit) .

Currently our primary research objective is to encourage and assist the development of better and faster measures of economic activity. In cases where we believe we can contribute directly, as opposed to through highlighting the work of others, we are producing our own measures of economic activity.

Our work is mainly of interest to investors, organisations and individuals in the financial sector and to significant corporations with global operations, as well as governments and academic economists.
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