Dentsu ad spend report predicts continued growth despite global economic turbulence
Advertising investment is forecast to grow by 8.7% globally in 2022 and 6.7% in Australia, according to the latest dentsu Global Ad Spend Forecast report. The twice-yearly report which combines data from close to 60 markets globally, anticipates US$738.5 billion will be spent globally in its July ‘reforecast’. In the Australian market, dentsu is anticipating spend to reach AUD$19.2 billion by the end of the year.
The reforecast of global media investment is released in the context of escalating media price inflation, geopolitical tension, upcoming key elections, and one of the most anticipated global sports events of the year, the FIFA World Cup. Due to continued uncertainty, the current and historical comparison data has also been adjusted to remove Russian investment from the forecast, to better reflect the rest of the international ad spend trends and predictions.
The latest dentsu Global Ad Spend Forecast points to a continued recovery despite another year of economic uncertainty, with global 2022 ad spend of US$738.5 billion, which is based on an adjusted growth forecast to 8.7%. This is based off a stronger 2021 and with the expectation of rising inflation impacting consumer demand. Looking ahead, dentsu expects the 2023 global advertising market to increase by 5.4% to reach US$778.6 billion followed by a further 5.1% increase in 2024.
These trends are consistent with what dentsu is seeing in the Australian market: 2022 growth has been revised up from the previous prediction of 6.1% in the January 2022 report to better reflect a greater level of demand in H1 2022 than previously expected. Government and political party advertising in the lead up to the Federal election drove demand and underpinned ad spend particularly across Digital and TV during the first half of the year.
Digital has accounted for a 64.8% share of spend in 2022 and is forecast to grow by 6.3% by the end of the year, and by 5.9% in 2023. TV ad spend, which includes BVOD, accounts for a 20.5% share and is forecast to grow by 5.5% in 2023 and 3.5% in 2024. Continued ad market growth in Australia is expected at 5.4% in 2023 and 4.7% in 2024, with Digital and Online Video/CTV/BVOD being the key driver.
Says Melanie McDonald, general manager, media investment, dentsu ANZ: “While it has been a turbulent environmental start to the year, the Australian market continues to see growth in ad spend across all key channels, with digital screens performing particularly well as brands capitalise on market demand.
“As a result, we have revised our predictions for the remainder of the year and are anticipating digital video will continue to grow, particularly BVOD and CTV, supplementing strong demand in the linear TV market. Video is increasingly becoming the new ‘shop window’ by offering both branding and performance outcomes for clients. In addition to this, an accelerating eCommerce and retail display landscape will continue to drive budgets.
“It is pleasing to see the bounce back of Out of Home and sustained growth of Audio post the two years of lockdowns.
“Given the current climate, it is our role to best prepare clients for what comes next. This means ensuring clients have greater transparency of ad spend, paired with local and global consumer trends so they can maximise their investment and form deeper, more meaningful connections with their customers.”