The world’s leading ad agencies are positioning themselves in Brazil, Russia and China — countries that are expected to provide almost a third of the growth in global advertising over the next three years. That’s according to a report by S&P Capital IQ Equity Research, a unit of publishing giant McGraw Hill.
Most major advertisers already have a foothold in these BRIC economies, where the advertising market is projected to grow by an average 10.7 percent a year over the next three years — more than three times the growth rate in the developed world. Over the next 15 years, big emerging markets will add $200 billion to the global ad spend, S&P Capital IQ reckons.
Hopes, unsurprisingly, are pinned on the soccer World Cup in 2014 and the 2016 Olympics, both hosted by Brazil. Russia hosts the 2014 Winter Games in Sochi and Football World cup in 2018 and both these events are expected to boost ad spending. The behemoths of the ad world have prepared for this, says Alex Wisch, an analyst at S&P Capital IQ:
The global agencies have already developed a solid foundation in the BRICs, so the heavy lifting on the investment ramp is largely behind them.
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Accordingly, S&P Capital IQ has a ‘buy’ recommendation on advertising agencies Publicis, Interpublic and Omnicon while advising a “hold” on WPP.