As part of the integrated network of global dentsu agencies, iProspect has access to vast resources, specialists, partnerships data, and insights which we’re able to leverage for the benefit of our clients and colleagues in order to help understand what’s next. One of these valuable insight tools is the bi-annual dentsu Global Ad Spend Forecasts report which looks at advertising spending from almost 60 markets around the world to project brand behaviours and media industry trends for the coming years.
Based on data from more than 50 markets, the newest edition of the semi-annual dentsu Global Ad Spend Forecasts points to a continued recovery despite another year of economic uncertainty, with global 2022 ad spend of US$738.5b. We have adjusted our 2022 growth forecast by -0.4 percentage points from 9.1% to 8.7% off a stronger base in 2021 and with the expectation of rising inflation impacting consumer demand.
Industry wise, the greatest growth is forecast for the Technology sector (+11.3%), which has benefited from the hybrid workplace model and people’s greater reliance on digital devices. Our forecast for the Automotive sector, still impacted by supply chain issues, remains stable (+7.9%) and in-line with our January 2022 edition of the dentsu Global Ad Spend Forecasts, while for the Travel & Transport sector (+3.7%) a moderate recovery is forecast.
Digital continues to drive global ad spend growth in 2022 (+14.2%) to reach US$409.9b, a 55.5% share of total ad spend. This growth is supported by Video (+23.4%), Paid Social (+21.9%), Search (+12.9%), and Programmatic (+19.9%). The digitalisation of traditional media will be another key driver of total ad spend growth in 2022.
Boosted by the FIFA World Cup in Q4, Television ad spend is expected to grow by 3.6% to reach US$192.8b, with Linear TV growing by 2.0%, Connected TV (CTV) by 22.3% and Broadcaster Video on Demand (BVOD) growing by 16.0% as audiences shift to digital platforms.
We maintain our double-digit growth forecast for Out-of-Home (OOH) and Cinema, with 11.5% and 19.6% growth respectively. Audio will grow more slowly at +5.0%, with Digital Radio accounting for 23.5% of Audio media investments. Print forecast is negative at –3.6%, in line with structural trends observed for several years.
Looking ahead, we expect the 2023 global advertising market to increase by 5.4% to reach US$778.6b followed by a further 5.1% increase in 2024.
We invite advertisers to reflect specifically on three spaces to watch covered in the report as they look to optimise their media investment strategies:
- The new branded entertainment opportunities, enabling access to ad-free spaces
Dentsu estimates the average production spend on long form content alone almost doubled in the last two years; and as advertising is currently facing media price inflation, we can expect this trend will accelerate in the next twelve months. Building on their own insights of viewers and social conversations, brands no longer hesitate to pitch new ideas to channels, which in turn now offer wider distribution options, accurate metrics, stronger return on investment, and even new revenue streams.Broadcasters have become more collaborative in recent years, streaming platforms are open to collaboration, and TV producers are also keener to share their valuable intellectual property.Long considered as a simple nice to have, Branded Entertainment is becoming a key component of media plans in the attention economy.
- The ascent of gaming advertising, with increasing in-game, in-stream, and sponsorship possibilities
Gaming has become a mass medium commanding large audiences and driving colossal revenue. Unsurprisingly, the promise of big and valuable audiences is increasingly attracting brand investments in game-related advertising. We expect the growing concentration and diversification dynamics at play in the gaming industry today to have a massive impact on both the gaming experience and advertising opportunities in the next years. In the medium term, the gaming industry will lead the adoption of emerging technologies such as mixed reality, Web3.0, NFTs and the Metaverse. Therefore, advertising opportunities enabled by these technologies should logically appear first in gaming. We also anticipate rapid development in the collection and activation of gamers’ data to serve content more effectively, while also ensuring better reach and attention. As the definition of gamers moves away from stereotypes, brands must understand their audiences’ gaming habits and what value they can bring if they are to seize the gaming opportunity. This was also a topic we explored deeply at iProspect recently with our series on Gamified Commerce.
- The increasing addressable media possibilities, with a privacy-first mindset
The last decade has seen digital media become more addressable, enabling personalisation at scale, predicated on user data. However, consumer sentiment on the use of their data for advertising has changed significantly. Consumers expect transparency, choice, and control over their data; not just pop-up notices, but thoughtful choice in how their data is used. The ability to build direct connections with consumers through first-party data is vital if brands are to build a foundation for future addressability and personalisation. The ability to harness signals that are not personal - such as context - to understand a consumer’s state of mind is equally important. Overall, the rise in consumer expectation on privacy is a positive change. For the long-term vibrancy of the marketing ecosystem, it is critical that brands take tangible, constant steps to build, rebuild and preserve consumer trust.
Of course, many factors contributing to the uncertain economic outlook could influence the forecasts, from the evolution of the pandemic to escalating media price inflation, to geopolitical tension and upcoming key elections. Dentsu recommend the industry keep a close eye on key economic indicators, which is what we will be doing in partnership with our clients at iProspect to ensure we’re ahead of any disruption.
For more information, please download the full dentsu Ad Spend Report
