Advertising investment is forecast to grow by 3.3 per cent globally in 2023, according to the latest dentsu Global Ad Spend Forecasts report.
Overall, an anticipated US$727.9 billion will be spent worldwide by the end of the year, according to the mid-year ‘re-forecast’ of the twice-yearly report.
The adjusted dentsu Global Ad Spend Forecasts report for 2023 points to continued growth, albeit adjusted marginally downwards from the 3.5 per cent predicted in the December 2022 report, in the most part due to macroeconomic factors. Reading between the lines, the report suggests growth driven by media price inflation rather than increased advertising volume, where advertising spend at constant prices is expected to decline slightly, with –0.6 per cent reduction year on year in the top 12 spending markets: USA, China, Japan, UK, Germany, France, Australia, Brazil, India, Canada, Italy, Spain.
The global outlook however, as forecast by dentsu specialists in almost 60 markets, is more positive, with spend set to accelerate faster in 2024, increasing by 4.7 per cent to US$762.5 billion. This boosted ad spend is being driven by major sporting and societal focal events such as UEFA Euro Championship and the US presidential election.
2023 will see digital continue to grow, but in an uncharacteristic single digit increase (7.8 per cent), which has only happened twice in the last 20 years: in 2009 (financial crisis consequences) and in 2020 (COVID-19 pandemic). Looking ahead, single-digit growth in digital is expected to become the norm, with a fairly consistent dollar increase year-on-year for 2024 and 2025 (circa US$26 billion) against a backdrop of around 60 per cent total market share.
Peter Huijboom, Global CEO, media international markets, dentsu said: “For years now we’ve seen the industry pivot towards digital, more than doubling investment in the last five years, thanks in part to the almost unlimited potential to reach, engage and sell to individual consumers. It has been one of the big drivers for growth, but with finite marketing budgets available to brands it’s clear we are now starting to reach a point of digital maturation within the campaign mix alongside more traditional channels.
Huijboom noted that there are still some key markets, including India, where digital is yet to reach full maturity, but predicts that it is through new channels and updated tech and platforms where the future for consistent growth lies.
Digital spend is expected to reach US$424.3 billion by the end of 2023, accounting for 58.3 per cent of all advertising spend. The report highlights emerging digital categories such as retail media and connected TV as particular areas to watch.
From a channel perspective, the outlook is now showing a mixed forecast with perhaps, most notably, a drop within the television ad spend for the year. TV ad spend is now expected to fall by 3.1 per cent, totalling US$170.2 billion by end of year, which in itself appears to be a temporary blip in its typically upward spending trend, with positive growth returning for 2024 onwards.
Except for print ad spending, which continues its decline (-4.8%), other media channels are holding ground, with incremental year-on-year increases for OOH (3.8%), cinema (2.1%) and audio (0.8%).
“This pattern of spending, based on our long-term extrapolations, could see Out-of-Home surpass print spend and become the third most popular format, sometime during 2026,” said Huijboom. “Of course, we’re excited about the impact Generative AI could have on our industry with the arrival of new in-channel opportunities for brands to embrace, so we’ll need to see if it remains the case.”
This dentsu Global Ad Spend Forecasts report not only looks at the data from 58 markets, but also examines some of the key factors impacting the regions, advertising sectors and sustainability. The full dentsu Global Ad Spend Forecasts can be downloaded for free here: dentsu.com/ad-spend-may-2023
