The ad market should expect net advertising sales in the Nordic region (Denmark, Finland, Norway, and Sweden) to grow by +4% in 2019, to $10.1 billion, following growth of +5% in 2018.
The forecast comes from Mediabrands’ research unit, MAGNA.
As advanced and intense advertising markets, the Nordic countries have high ad-spend-per-capita ratios, ranging from $244 (Finland) to $409 (Norway) compared to a Western Europe average of $252.
Sweden is the largest and most dynamic of the Nordic markets, with advertising revenues expected to increase by +6% in 2019 to 37 billion SEK (4.3 billion USD). This represents a slight slowdown from 2018 growth of +8%, which was driven by strong digital (+14%), radio (+9%), and television (+3%) sales. TV CPM inflation peaked at +15% in 2018, the highest rate among the Nordics, but is expected to be more moderate in 2019 (+10%). This is due to softening demand as advertisers shift more spend to digital and radio.
Denmark follows with an expected growth of +3% in 2019, in line with 2018. Television ad sales are much lower in Denmark (-3% 2018, -4% 2019), as advertisers in traditionally television-heavy categories like Beverages and Finance are turning increasingly to OLV (+25%) and radio (+9%). Finland and Norway should experience slower growth (+2.2% and +1.7%, respectively). Economic activity remains well oriented, with the IMF expecting real GDP to grow by +2.1% this year in the region.
The Swedish economy will see the strongest growth (+2.4%), while Finnish economic growth will continue to slow down (+1.8%). Consumer price inflation (CPI) will be essentially flat.
Digital cooling down
Digital advertising growth is cooling down now that digital represents nearly 60% of regional NAR. Finland, the smallest digital market among the Nordics (40% of NAR), will see the strongest growth in 2019: 13%, in line with 2018. Sweden, the most advanced digital market (65% of NAR), is expected to see growth of +10% in 2019, a slight slowdown from 2018 (+13%).
Smartphone penetration is nearly ubiquitous in the region and mobile advertising already accounts for nearly 60% of total digital advertising spend, and one third of Nordic total NAR. In 2019 this will grow to two-thirds of digital spend and nearly 40% of total NAR. Mobile growth continues to dramatically outpace desktop across the Nordics (+19% in 2019, vs -3% for desktop).
World Cup in 2018
The FIFA World Cup 2018 was broadcast on public broadcasters Danmarks Radio (DR, Denmark), Yleisradio OY (Finland), Norwegian Broadcasting Company (Norway), and SVT (Sweden, public, ad-free), alongside commercial ad-supported broadcasters TV2 and TV4. Though Denmark and Sweden’s national teams qualified to participate to the final tournament in Russia, the event had minimal impact on TV advertising revenue trends. Sweden saw the strongest TV spend growth (+3%), along with the highest CPM inflation (+15%), due to the consistently sold-out environment and declining viewership (volume). Norwegian and Finnish TV spend grew by +1%, while Danish spend declined by -3%. 2019 is expected to see flat (Sweden, Norway, Finland) or declining (Denmark) spend.
2019 will see continued declines for print advertising revenues, from a relatively high market share (14% newspaper, a regional high, and 3% magazines). Newspaper NAR will decline -9% in 2019 and magazines by -10%, following declines of -11% and -10% in 2018. Finnish newspaper readership is fairly steady compared to neighbors Sweden and Norway, and it is the largest print market in the region (30% of NAR).
MAGNA expects OOH ad sales will grow by an average +4% in the region in 2018, with digital OOH driving growth (+8%). Sweden is the most advanced DOOH market in the region (20% of OOH NAR), while Denmark is expected to see the strongest growth (+21%). Radio NAR will grow by +5%, with the strongest growth expected in Sweden (+9%) while Finland and Norway will be flat (+1-2%).
On January 1st, 2019 15 Swedish radio networks, including NENT (Nordic Entertainment Group), DB Media, and Skärgårdsradion, will begin broadcasting on DAB+. The rollout will begin in metropolitan areas before expanding to full national coverage. In 2017, Norway became the first country in the world to switch off FM radio networks and transition fully to DAB+; at this point it is unclear if Sweden or any other Nordic country plans to follow a similar approach in the near term.