Australia’s global ad spend growth to fall below global forecasts: Dentsu

Dentsu has released its annual global ad spend forecasts, foreshadowing a “challenging macroeconomic background” and another year of moderate year-on-year (YOY) growth for 2024.

Globally, dentsu has forecast ad spend to grow by 4.6% YOY in 2024, ahead of just 2.7% YOY growth in 2023. The advertising group attributed much of the growth to media price inflation in 2023, with ad spend at constant prices actually declining by 0.7%.

After a record 2022, growth was even more minimal in the Australian market, with the forecast for 2024 levelled at a marginal 2.3% YOY, after a very slight YOY rise of 0.5% in 2023.

iProspect Australia national head of investment, Ken Lam, said the “moderate growth” would be “driven by continuing growth in travel, automotive and food and pharmaceutical” as well as “bounce back in the retail, finance and technology sectors”.

He continued: “Whilst locally, we have seen a relatively strong 2023 so far with total ad spend back only 2% Jan-Oct YTD from a record year in 2022, despite a year of economic uncertainty. With the latest news from RBA to pause interest rates in their final meeting this year, there should be optimism for advertisers heading into 2024, and a great opportunity for brands to accelerate growth through opportunities in emerging tech like AI, advancing automation and digitalisation capabilities to maximise performance, effectiveness and outcomes.”

The forecast is less optimistic than figures put forward last week by IPG Mediabrand’s investment intelligence arm, Magna, which estimated total ad spend growth in Australia to come to 4.9% in 2023, and 3.8% in 2024.

However, dentsu’s ad spend forecast for the wider APAC region were more in line with global figures, with 2023 pinned at 3.5% growth and 2024 at 4.0%, carried largely by strong growth in the India market.

Commenting on the forecasts, global practice president for dentsu media, Will Swayne, said: “Despite the current worldwide geo-political instabilities and economic outlook, in 2024 we can see how significant major political and sporting events are for creating positive growth in ad spend. But overall spend is just one of the metrics we need to consider, so for the first time, we have conducted a deep dive analysis into market GDP and population as new alternative ad spend benchmarks for our clients.”

Looking to channels, and the report highlights yet another strong upward trajectory for digital, expected to account for 58.8% of global advertising spend in 2024, however remaining in the single digits for YOY growth, at 6.3% for 2023 and 6.5% for 2024.

Retail media looks to be continuing its acceleration, pointing to significant opportunity in the burgeoning digital channel, with a projected global growth of 20.8% for 2024.

The forecast supports comes as Morgan Stanley analysts warn that rising retail media was set to take $1.1 billion from traditional media companies by 2027.

Television appears to be in for a more moderate growth of 2.9% in 2023, driven primarily by linear TV as Total TV share of global spend steadies.

Declining spend in print is expected to slow in 2024, down to a 2.6% decline YOY, compared to decline of more than 4% in the prior two years.

Out-of-home was forecast to grow 4.4% YOY in 2024, while audio would only feel a slight uptick of 0.7%.


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