Ad spend to grow at a slower rate in 2023 as digital surges: Dentsu report
Advertising investment is expected to grow by 3.3% globally in 2023, with the Australian market forecast for 3.2%, according to the latest Dentsu Global Ad Spend Forecast.
Last year, global spend was at 7.9%, and despite an anticipated spend of US$727.9 billion in 2023, the pace of growth is expected to slow down.
Globally, digital spend is forecast to grow by 7.8% year-on-year, while out-of-home spend is expected to grow a further 3.8%. The digital growth can be attributed to emerging categories including retail media and connected TV.
Total TV advertising spend is expected to decline by 3.1% in 2023, to US$170.2 billion, before growing again by 4% in 2024.
The Asia-Pacific region is forecast to experience the greatest pace in ad spend growth in 2023, at 4.6%.
Australia is expected to spend US$13.7 billion in 2023 on advertising, increasing to $14 billion in 2024, and $14.3 billion in 2025.
Moving forward, the report said search, retail media and streaming TV advertising spend are some of the biggest spaces to monitor in 2023 as they are all expected to have significant growth.
Search ad spend is forecast to grow 8.9%, attributed to recent developments around generative AI. Applications such as ChatGPT have ‘the potential’ to change how people access information online and how they interact with brands.
“By generating ChatGPT into its search results, Bing has been the first mover in the search engine space,” the report stated.
Retail media is following an upward trend, as marketers find it to be a very successful strategy.
The report said that “many feel that retail media enables them to better measure the impact of their media investment on their sales.”
Ad spend on streaming TV is also rising fast, as free ad-supported television (FAST) and ad-funded video on demand offerings have become more ‘sophisticated’ and well used.
Dentsu’s advertising expenditure forecasts are compiled from data collated from Dentsu agencies until the second half of April 2023 and based on local market expertise.
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Lauren McNamara is a journalist at Mumbrella, covering the creative and PR beat. She joined in November 2022 as editorial assistant, after completing a Bachelor of Communications (Journalism) at UTS.
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