Australian ad market to show ‘moderate, but positive’ 6.2% growth in 2022, says Seb Rennie

WPP’s investment arm, GroupM has delivered its global forecast for 2022, with the prediction that the Australian market will show growth of around 4-5% over the next five years, in line with France, Germany and the US.

The report is written by GroupM global VP of business intelligence, Brian Wieser, also forecasting that the US, China and the UK are set to continue to be the world’s “most important markets”, along with local advertising market growth of 6.2%  in 2022.

GroupM Australia chief investment officer, Seb Rennie, who returned to the position this year after three years in Canada, said that the market can reflect on a year of “incredibly positive growth” of 21.5%, as it comes to a close.

“Pure digital and digital extensions of traditional media have seen the largest growth reflecting the changing media consumption habits of consumers, the diversification and growth of ecommerce channels and the growth of business rooted in the internet economy.”

Seb Rennie

“Whilst not reaching the heights of the US, China and UK who are leading the global growth; 2022 will bring the Australian media sector more moderate, but positive, growth at 6.2% with a continuation of digital trends from 2021 and the post lockdown release of pent up demand for OOH and Cinema.”

GroupM’s forecast follows a global outlook from Publicis agency, Zenith yesterday, with the prediction that the local market will grow by a slightly more conservative 5% next year.

IPG Mediabrands agency, Magna has also delivered a forecast for the coming year, predicting a much more optimistic 10% of growth for the advertising economy in 2022, to reach $22.5 billion, with digital advertising leading with growth of 14%.

Share of ad revenue globally [click to enlarge]

GroupM’s Wieser said that new small businesses allocating resources to nationally oriented digital advertising, China based marketers capitalising on low-cost international shipping and using global digital platforms to reach overseas customers are contributing to faster-than-expected growth.

The overall forecast predicts 9.7% total market growth into 2022 (excluding US political advertising), a revision on the previously predicted 8.8% in June.

Over the next five years, GroupM predicts total growth to get back to the “mid-to-high single digits, with India, the UK, Brazil, Canada, Japan and China forecast to grow between 6-8% on average annually.

In 2021, Wieser said growth totalled 22.5% (excluding political advertising), again an upwards revision of 19.2% in June. GroupM notes that many of the underlying trends are “disproportionately concentrated in the US, UK and China”, which together account for approximately 70% of all the industry’s growth, despite making up about 60% of the total market.

Ranking of total size of revenue by market [click to enlarge]

Locally, Magna also reported that the local advertising market grew by 23.1% in 2022, to reach $20.3 billion, with digital advertising spending growth of 28%, reaching $14.5 billion, good for 71% of total ad spend.

Linear advertising format sales rose by 12% to 5.9 billion, however are still smaller than pre-COVID levels by 11% according to Magna.

It has been a year of transformation for GroupM, headlined by the appointment of new local CEO, Aimee Buchanan, following the departure of Mark Lollback in March. Rennie returned to GroupM Australia just days after MediaCom CEO Willie Pang was made managing director of GroupM services, later stepping down to join fintech startup, Limepay. In his place Yaron Farizon, became CEO of MediaCom AUNZ.

OMD’s former COO, Nathan Young, also followed Buchanan across to GroupM.

The WPP national country manager role remains vacant, following former CEO Jens Monsees’ departure this year.

Buchanan sat down recently with Mumbrella managing editor, Olivia Kruimel to discuss her move and plans at GroupM after six weeks in the role.


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