Lull in global Ad Spend Growth in 2023 – Dentsu Report
Joseph Ekeng
A recent report by Dentsu, titled “Global Ad Spend Forecasts,” has projected a further slowdown in global ad spend growth in 2023. The report attributes this slowdown to macroeconomic factors. According to the forecast, global ad spend is expected to grow by 3.3% in 2023, reaching $727.9 billion. This projection is slightly lower than the growth forecast of 3.5% that was predicted in December 2022 for the same period.
In comparison, the report highlights that ad spend experienced a growth rate of 7.9% in 2022. However, Dentsu points out that last year’s growth was primarily driven by media price inflation rather than an increase in advertising volume. When considering constant prices, ad spend is expected to decline by 0.6% year on year.
Within the EMEA region, the report identifies the UK as the top and fastest-growing market. However, the growth forecast for the UK has also been revised downwards from 3.6% in December to 3.1% in 2023. The projected ad spend in the UK for the year is estimated to reach $42.4 billion.
The report indicates that digital advertising, which represents over 70% of the UK’s ad spend, is expected to experience a slower growth rate of 4.5% in 2023, compared to the 6% forecasted in December. Meanwhile, TV ad spend is predicted to contract by 3%.
However, there are some positive trends in specific advertising channels. Out-of-home advertising is expected to grow by 6% and recover to near 2019 levels. Cinema advertising is projected to experience substantial growth of 22.1%, and audio advertising is expected to grow by 2.7%.
The forecast for print media has improved slightly since December, with the contraction rate improving from -2.5% to -1.8%.
The report outlines a gradually improving situation in the UK, aided by the 2023 Fifa Women’s World Cup. The growth rate is anticipated to be 4% in Q4 of 2023 and 3.5% in 2024. Additionally, the report notes that TV is expected to expand by 2% during this period.
Dentsu also emphasizes that economic uncertainty continues to impact the media and technology industries. It suggests that there is a growing focus on transforming businesses beyond the digital transformation of recent years. The report highlights the need for businesses to become effective entities that can endure challenging conditions over the next decade, relying on technology, people intelligence, data, sustainability, and purpose.
In terms of regional growth, the Asia-Pacific region is expected to exhibit the highest growth rate in 2023 at 4.6%, followed by the Americas at 2.9% and EMEA at 1.9%.
Regarding specific channels, global TV ad spend is projected to decline by 3.1% to $170 billion by the end of 2023. However, the report suggests that this decline is likely to be a temporary setback, and TV ad spend will return to positive growth from 2024 onwards. Print media is anticipated to continue its decline at a rate of -4.8%. On the other hand, out-of-home advertising is expected to grow by 3.8%, cinema by 2.1%, and audio by 0.8%.
Peter Huijboom, Global CEO of Media International Markets at Dentsu, commented on the findings. He noted the potential for out-of-home advertising to surpass print spend and become the third most popular advertising format by 2026, based on long-term extrapolations.
“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.
“There are still some markets, for example India where the digital potential is in its adolescence, who continue to see rapid growth in digital spending – contributing to the global uplift. But it is also through innovations in tech, updated platforms, new channels and changes in planning behaviors we’ll retain this consistent growth within digital investment worldwide.”
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