Total Irish advertising spend edges up to €1bn mark
16pc of all money is spent on Google, but that leaves just enough for the indigenous sector
Whisper it quietly: the Irish media industry can look forward to substantial growth in 2016, with every media category expected to benefit from the ongoing upturn in the economy and the loosening of marketing purse strings.
Not only that, but a growth rate of around 10pc can be expected, significantly outpacing the Central Bank's recent forecast of a 4.8pc growth in GDP for the year.
If the anticipated growth rate of 10pc does materialise, it will mean that investment in media - which typically accounts for as much as 80pc of the total spent on advertising services - will rise to around €914.6m in the Republic of Ireland, according to Core Media, Ireland's largest media-buying group.
A slightly more conservative forecast by media agency Carat Ireland is pitched at €851m, but this still points to a growth of around 10pc, based on its previous year's figures.
The rising economic tide will indeed lift all boats, with digital leading the way with a forecast advertising spend in the region of €304m. It will be followed by TV, which is expected to see its slice of the advertising pie increase from €228m to €244.8m, while newspapers and magazines can expect a modest increase from €163.9m to €164.5m.
Ireland's commercial radio sector can also expect to see its coffers boosted by €5.5m this year, while the outdoor advertising sector, which has been performing strongly over the past two years, can also expect a boost, with €68.8m expected to be invested in the media.
The €914.6m which Core Media is forecasting for 2016 compares with the €832m that was spent in 2015 and the €771m in 2014.
In other words, an extra €143m (or €124m, according to Carat) will be sloshing around the coffers of media companies this year that wasn't there two years ago.
Before we pop the champagne corks, however, let us rewind the clock back even further to the heady days of 2007, when door-stopper property and recruitment supplements and overpaid semi-state broadcasters were the order of the day. During 2007, an estimated €1.2bn was invested in advertising, rounding off nearly six years of unbroken revenue growth for the sector. So, with the first quarter of 2016 almost over, the industry is still likely to be €286m shy on the figure for 2007.
A lot has happened in the intervening period, of course. As everybody knows, in 2008, the media industry went into a tailspin when companies battened down the hatches and slashed their advertising budgets as they fought for their own survival.
Media organisations, most of which depend on advertising as an integral part of their revenue models, bore the brunt of these cutbacks and the industry entered a period of considerable retrenchment.
One of the big questions now is whether or not the industry will ever see a return to the halcyon days of 2007.
Of course, anything is possible - but for it to return to investment levels recorded in 2007, it would need to see a compound annual growth rate of around 9.4pc a year between now and the end of 2019, at the earliest. It's a tall order and a lot will depend on the performance of the wider global economy.
Given recent economic uncertainties and market volatilities, don't bet the house on it.
What will have changed by then, however, is the make-up of this €1.2bn. Over the next few years, investment in digital advertising will continue to power ahead by double-digit figures. A tipping point, that went largely unnoticed in the industry, was reached in 2015, when, for the first time, digital advertising overtook TV as the single biggest category of media spend. Over the next few years, the gap between the two will continue to widen.
While the €304m is indeed a welcome fillip to Ireland's burgeoning digital-publishing industry, it should be pointed out that not all of it will be winging its way into its coffers.
Companies like Google, Facebook and LinkedIn have become substantial players in the Irish market. Indeed, Core Media estimates that this year Google, across all its platforms, will generate around €175m on the island of Ireland alone. "Some 16pc of all advertising money spent on media in Ireland is spent on Google," notes Alan Cox, CEO of Core Media.
While the advertising juggernaut that is Google looks set to hoover up the cash at a rate that would make Jimmy Dyson's engineering team green with envy, the rest of the media industry can be thankful for small mercies.
And we will gladly take the 10pc.
Sunday Indo Business