GroupM dials down Australian ad market growth expectations for 2023
GroupM has downgraded the outlook of Australia’s advertising growth in 2023, backflipping its statement last year that the market will maintain its 3.4% growth despite challenging market conditions.
The WPP investment arm today released the latest instalment of its biannual media forecast report, ‘This Year, Next Year’. According to the estimate, the Australian advertising market is only expected to grow by 0.2% in 2023.
However, the group maintained its estimate of global advertising growth in 2023, which is 5.9%. Australia’s ad revenue in 2023 is expected to reach US$14 billion, out of US$874.5 billion for the entire global market (excluding US political advertising).
GroupM’s recently appointed chief investment officer, Melissa Hey, said while Australia has had a slower start to the year, there are many “pockets of growth including BVOD, podcasts and streaming”.
“Digital continues to see growth, and retail media remains a bright spot on the horizon driven by increased players, greater innovation and changing consumer behaviours,” she said.
“While the cost-of-living increases may continue to impact consumers in the second half of the year, the marketing lessons from previous downturns remain the same: the brands that maintain a consistent market presence through advertising gain an extra share of voice and consumer trust.”
[click to enlarge]: Largest global media owners
A breakdown of channels saw digital coming out as the top earner in 2023, which will account for 68.8% of total global ad revenue despite a deceleration in growth. There will be opportunities for new digital players as established tech companies tackle regulatory challenges.
Linear TV spend is expected to decline continuously, but connected TV revenue will see another double digital growth of 13.2% in 2023 to US$25.9 billion.
Print, whose efficacy as an advertising channel has been questioned lately in Australia, is forecast to decline a further 4.8% in revenue this year. The report said while magazines remained an important channel for luxury advertisers, the systemic decline of the channel will be difficult to offset.
Retail media will be the third fastest-growing advertising channel in 2023 (behind digital OOH and CTV). Retail media, which the group now defines as including ad revenue from last mile delivery services, will grow 9.9% to reach US$125.7 billion in 2023, and is forecast to exceed TV revenue (including CTV) in 2028.
AI will likely inform, or touch in some way, at least half of all advertising revenue by the end of 2023.
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Darcy Song was a reporter at Mumbrella, covering media owners, adtech and social platforms. She left in October 2023.
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