The new dentsu Ad Spend Report forecasts 9.2% growth in global advertising investment in 2022, outpacing real GDP growth[1]projections by 4.7 percentage points. Dentsu combines data from more than 50 global markets on a semiannual cadence. The current report anticipates US$745bn in global ad spend.
When compared to the recovery period following the 2008 financial crisis, today’s post-pandemic ad spend is expected to outpace post-2008 ad spend by almost three to one. In 2022 global ad spend is forecast to grow by 9.2%, almost three times more than the 3.4% growth in 2011. Comparing the two-year post-crisis ad markets, in 2022 the global ad market exceeds the 2019 pre-pandemic ad market by18.7%, whereas in 2011 the global ad market was 1.0% less than in 2008.
Following a 29.1% increase in 2021, we forecast Digital investment to grow by 14.8% in 2022. This will bring the Digital share of spend to 55.5% (US$408.4 billion) of the total as spend – meaning that the Digital share of spend will become twice as big as the Linear Television share of spend (26.9%) for the first time.
Growth across social media platforms is expected to continue this year, supported by short video formats, better commerce infrastructure like shoppable ads and streamlined payment processes. Advertisers have increased focus and resources into e-commerce, increasing display and search budgets on retailer web sites in reaction to new consumption habits. Search spend is forecast to grow by 16.9% in 2022 to US$144.9 billion, and Social spend is predicted to grow by 21.4% in 2022.
2022 is a year when media pricing is expected to be under pressure because of the continued economic uncertainty caused by the pandemic and expected inflation. For the first time, the FIFA World Cup will clash with Black Friday and Christmas and is likely to cause a bottle neck of ad-spend which could inflate media pricing further. Long-term media planning with clear targets and potentially front-weighted investments are highly recommended.
The growing importance of gaming and virtual worlds also gives us a vision of what might be coming with the next evolution of the internet: the metaverse. Although the metaverse does not fully exist yet, this open ecosystem made of hybrid, shared spaces that blend physical, digital, and virtual realities is expected to create tremendous opportunities for advertisers to reimagine their branded experiences.[2] This is an area where brands can experiment and innovate in 2022. This space could be less reliant on advertising, which will require brands to start testing new ways of interacting with consumers and start exploring new advertising paradigms.
We invite advertisers to reflect specifically on three of the brand considerations covered in the report as they develop their 2022 media strategy:
Adapt media strategy to shortages
As shortages continue into 2022, brands need to adapt their strategies to make the most of their media dollars. Upper-funnel programmes tasked to build awareness or engagement pre-sale are long-term endeavours that are not so impacted by supply chain. Conversely, direct response-focused digital media programmes optimised towards conversion are more stressed by these implications, given the difficulty of selling unavailable inventory. Brands should use structured data and feeds and automation to better inform their audiences about product availability by dynamically adapting the content of ads.
Boost E-commerce through retail media
As people constantly reinvent their unique path to purchase, media plays a paramount role in reconnecting brands to the consumer journey by enabling more personal, contextual, and valuable shopping experiences. Retailers, marketplaces, social platforms, grocery services, and super apps are all actively developing media portfolios with unique commerce-first solutions. Advertisers should include this growing media segment in their media mix. They should also strive to close the gap between discovery and purchase across the customer journey by making media campaigns directly shoppable where possible, leveraging the live commerce opportunity, and exploring relevant uses of technology such as augmented reality (e.g., through virtual product try-on).
Invest in brand to avoid growth plateau
Although newcoming players tend to focus their media activities only on performance-based tactics, familiarity is critical in times of uncertainty and is key to shaping long-term preferences. Therefore, advertisers should cultivate durable emotional connections with consumers through storytelling across their stores, products, and media campaigns. Performance marketing tactics can be used in a complementary way to address audiences that have been exposed to brand-building efforts. This balance of brand and performance will enable more continuous growth and will keep acquisition costs lower than trying to force one’s way to growth solely through performance-based tactics.
Of course, all forecasts are dependent on the evolution of the global pandemic, new COVID-19 variants, and related government restrictions. We recommend the industry keep a close eye on key economic indicators, which is what we’ll be doing in partnership with our clients at iProspect to ensure we’re ahead of any impacts to campaigns and business growth.
For more information, please download the full dentsu Ad Spend report
