Global advertising to grow 5.9% in 2023 – GroupM
By Joseph Ekeng
Global advertising is set to experience a 5.9% growth in 2023, according to the midyear forecast released by GroupM, a leading advertising holding company. This projection aligns with the company’s previous forecast from December. However, when factoring in inflation, the growth rate indicates a negative trend. The advertising industry saw a strong start in 2022, but it experienced a decline in the latter half of the year. In contrast, the trend has reversed for 2023, with a more promising outlook anticipated for the second half of the year.
Kate Scott-Dawkins, Global President of Business Intelligence at GroupM, attributes the recovery in ad revenues during the first half of 2023 to stickier inflation and a prolonged period of rising interest rates. She expects a more pronounced rebound in the second half of the year. GroupM’s forecast indicates that global ad revenue, excluding political ad spend, is projected to reach $874.5 billion in 2023. In the United States, ad revenue is estimated to grow by 5.1% this year, amounting to $325.3 billion, with an additional 5% growth expected in 2024.
The digital advertising sector is poised to expand its share of overall ad spending. It is anticipated to increase by 8.4% this year and reach 74.4% of total ad revenue by 2028. However, due to the dominance and maturity of the digital advertising market, the growth rate of digital ad revenue will no longer be in the double digits. GroupM foresees a gradual slowdown in digital ad revenue growth over the next five years.
Nevertheless, certain channels within the digital advertising realm will continue to experience rapid growth. Retail media, which includes delivery services like Instacart, DoorDash, UberEats, and Amazon, is expected to grow by 9.9% in 2023, reaching $125.7 billion. By 2028, it is predicted to account for 15.4% of total ad revenue, surpassing overall TV revenue. However, retail media represents only the third-fastest-growing category within digital advertising.
GroupM’s data reveals that digital out-of-home (DOOH) and connected TV (CTV) occupy the first and second positions in terms of growth rate. It is important to note that ad spending in both categories is still relatively small compared to retail media. DOOH is projected to grow by 26.1% in 2023, amounting to $13.3 billion and capturing 37.2% of the entire out-of-home (OOH) revenue. By 2028, DOOH revenue is expected to represent 43% of the OOH revenue. The recovery of the out-of-home sector as a whole occurred a year earlier than anticipated in GroupM’s December forecast. The company estimates that global OOH will grow by 12.7% in 2023 and continue its growth trajectory through 2028.
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