Advertising Spend

WARC has conducted an annual survey of global advertising expenditure since 1980, issuing questionnaires to monitoring organisations, media owners industry bodies in 100 markets worldwide. A full list of WARC’s partners in this area can be found below.

Advertising expenditure data are compiled by WARC’s partners using differing methodologies. For example, the UK data are collected via media survey, the Japanese data stem from media agency estimates and Russian data are informed by expert advice from panels drawn from agencies, media owners and research companies. Many other countries use data compiled by monitoring organisations which use volume estimates multiplied by rate card values to derive expenditure estimates.

How advertising spend data are harmonised

Where possible, WARC publishes harmonised data (net of discounts, including press classified adspend and agency commission but excluding production costs) to give a more accurate, comparable picture of each country's ad market. The table below shows the markets for which advertising spend figures have been harmonised.

Harmonised

• Algeria
• Argentina
• Australia
• Austria
• Belgium
• Brazil
• Bulgaria
• Canada
• Chile
• China
• Colombia
• Costa Rica
• Croatia
• Cyprus
• Czech Republic
• Denmark
• Ecuador
• Estonia
• Finland
• France
• Germany
• Greece
• Guatemala
• Honduras
• Hong Kong
• Hungary
• India
• Indonesia
• Israel
• Ireland
• Italy
• Japan
• Kazakhstan
• Latvia
• Lithuania
• Macedonia
• Malaysia
• Malta
• Mexico
• Moldova
• Morocco
• Netherlands
• New Zealand
• Nicaragua
• Nigeria
• Norway
• Pakistan
• Panama
• Pan Arab
• Paraguay
• Peru
• Philippines
• Poland
• Portugal
• Romania
• Russia
• Serbia
• Singapore
• Slovak Republic
• Slovenia
• South Africa
• South Korea
• Spain
• Sweden
• Switzerland
• Taiwan
• Tunisia
• Turkey
• Ukraine
• UK
• Uruguay
• US
• Venezuela
• Vietnam

Rate card

• Bahrain
• Bosnia
• Egypt
• Georgia
• Ghana
• Jordan
• Kenya
• Kosovo
• Kuwait
• Lebanon
• Luxembourg
• Mozambique
• Oman
• Qatar
• Saudi Arabia
• Syria
• Tanzania
• Thailand
• UAE
• Uganda
• Yemen
• Zambia

The money spent by advertisers, across display, classified and search formats, can be split into five component parts:

1. Tax: Not levied in every country covered by WARC’s global survey of advertising investment. Where it is applied, it is not always on the same part of the advertising industry.
2. Production costs: The costs of producing the advertisement.
3. Income to media: The money media owners charge for their advertising space or time.
4. Agency commission: The advertisers’ payment to their advertising or media agency. This may be a fixed commission (i.e. a percentage of the total budget), a flat fee or some other form of remuneration.
5. Rate card discounts: The amount of money that advertisers or agencies negotiate off the official price. The level of discounting varies from country to country and medium to medium.

Adspend data collection methods vary widely among WARC’s partners. However, all data can be split into the component parts listed above. These components can be used to produce data that are comparable across countries. Many countries supply data that fit WARC’s definition of advertising expenditure (that the data are net of discounts, including press classified adspend and agency commission but excluding production costs), but when data do not fit, they are harmonised.

Fig. 2 shows the harmonisation process. In this example, the raw adspend data include agency commission, income to media and production costs. Press classified is included but no separate figures are given and the data are based on card rates (i.e. they exclude any discounts). In order to make the data comparable, estimates from the source organisations are applied to produce a figure that includes and gives values to agency commission, media costs, press classified and production costs, and excludes discounts. From this total figure, the relevant components are taken to produce final, harmonised, comparable figures that conform to the WARC’s definition of advertising expenditure.

Internet advertising expenditure

The majority of internet advertising spend data are provided by the Interactive Advertising Bureau (IAB). These data already conform to WARC’s definitions and require no harmonisation prior to publication.

IAB data are split into three primary formats: search, display and online classified, and are defined in the following ways:

Search: advertising appearing on specific word requests on search engines, excluding SEO (fees paid to a 3rd party to improve website ranking in search engines).

Online classified: a fee paid by an advertiser to place an ad or listing around a specific vertical such as automotive, recruiting and real estate, regardless of the outcome of the ad (i.e., the fee is paid even if there is no ‘sale’)

Display: banners, buttons, skyscrapers, overlays, interstitials, and pop ups displayed on a website.

WARC also classifies online video as a display format, per IAB definitions. Online video advertising can be defined in numerous ways, though principally, these are:

• in-stream video advertising (pre-rolls, mid-rolls, post-rolls)
• in-stream banner overlays
• out-of-stream video advertising (e.g. self-play video on social network, not embedded in non-advertising video content)
• contextual video advertising (e.g. branded video players,
• contextual banner advertising sold against video content

The complete list of formats included in online display totals is as follows: online display advertising (as defined above), online video advertising (defined above), affiliate marketing, integrated content, newsletter advertising, interactive television, mobile display advertising, programmatic buying, real-time bidding, in-game advertising, tenancies, sponsorships, and social media.

Media Consumption

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Media costs

Media costs data from 2016 onwards – including forecasts – are derrived from media inflation data provided by the World Federation of Advertisers (WFA), which is calculated from a consensus of advertising agencies and auditing firms.

Media cost data between 2003–2016 were provided by the global media agency group, OMD. Data were collated from an annual survey of local offices in 62 markets, and cover the following media and target audiences:

Media covered: TV, newspapers, magazines, radio, out of home, cinema and internet.

Target audiences: adults, men, women, main shoppers, kids, young adults, upmarket adults and professionals.

The costs shown are after the deduction of negotiated discounts, but before the deduction of agency commission. The cost per hundred GRP (Gross Rating Point) figures have been calculated by multiplying the cost per thousand figures by the relevant universe (population). The conversions from local currency to US$ have been carried out using annual average exchange rates from the International Monetary Fund (IMF) for the year.

Definitions

The purpose of WARC's global media cost data is to provide information in a standardised, summarised, comparable format, which will help the user determine a broad estimate of a brand's likely cost of communicating its marketing message. It should not be used to calculate the definitive price of any specific campaign; its role is merely to provide an indication.

Media expenditure, whether at the brand, product category, advertiser or media sector level, can be measured with reasonable precision in many markets. A number of monitoring companies provide these data on a regular basis to advertisers, agencies and the media. On the other hand, reliable media cost information, based on a combination of both media expenditure and audience delivery data, is far harder to come by.

What an advertiser ideally wants to know is the likely cost of buying a typical media schedule for a brand(s). The problem is of course that what represents a 'typical schedule' for one brand or advertiser will be very different to that for another. For example, TV costs can vary due to a large number of factors: channel mix, daypart mix, flighting, seasonality etc as well as the negotiating power of the agency or advertiser. So the cost of one advertiser's typical schedule can be very different from another's. And, of course, the nature of a typical schedule will vary from market to market.

One factor that has been taken out of the mix is commercial length. Almost all TV cost data here are based on a 30-second commercial length, and other standardized formats have been used for other media.

Television	30 seconds
Newspapers	A4, black and white
Magazines	Page Colour
Radio	30 seconds
Out of home	Various
Cinema	30 seconds
Internet	Banner 468x60

There will also be differences between countries in the precise definition of the target audience – and this will depend primarily on the way in which these groups are defined in the local media research surveys. For example, in some cases, the 'adult' definition refers to all individuals aged over 18, in others this might be 15, 12 or even 10. For the other global media cost comparison audiences there will also be country-by-country variations – and in the case of professionals, where the data exist, each country has its own distinctive definition.

Users of the data should take particular note of the target audience definitions. For example, in most countries 'adults' will be defined as individuals that are over a certain age, perhaps 15 or 18. However, in some countries, the standard definition includes an upper age limit so, for example, the Canadian data are based on adults aged 25 to 54. Any narrowing of the audience definition will reduce the size of the audience and therefore increase the recorded cost per thousand figure.

Notes by Market