Major advertising forecasting firms say global advertising growth in 2023 will be slower than previously predicted.
Media owners’ ad revenue will grow 4.8% to $833 billion next year, according to a new forecast from Magna, a media investment firm that is part of
Cos.’ Mediabrands. Magna predicted in June that 2023 would produce a 6.3% increase.
Magna said 2022 growth will total 6.6%, partly reflecting a boost from spending around the midterm elections in the U.S. That is down from the 9.2% it predicted in June because nonpolitical spending was weaker than expected in the second half of the year.
“The economy has slowed down more than expected six months ago, which was partly mitigated in the U.S. because political spending was even stronger than expected six months ago,” said
executive vice president of global market research at Magna and author of the report. “Of course, it’s not going to help when it comes to 2023. We’ve reduced the growth expectation for almost every media category for next year, but we still expect that the market will stabilize and not fall.”
Marketing sectors such as consumer-packaged goods and finance could see flat ad spending in 2023, while entertainment, travel and betting will continue to be driven by regulatory relaxation and pandemic recovery, Magna said. Automotive advertising could grow again after a period of moderate decline as the industry gradually emerges from the supply-chain crisis, the firm added.
A separate forecast from media and data giant GroupM, part of
PLC, predicted that global advertising revenue will grow 5.9% next year, a downgrade from its 6.4% estimate in June.
GroupM said global advertising revenue this year will grow 6.5%, excluding political advertising, down from its June forecast of 8.4%. Growth in China will be less than expected because of that country’s pandemic-related lockdowns, the firm said.
“I think we’re feeling some of that deceleration into the end of this year, and maybe it’s feeling a little bit more gloomy, even though we’re still seeing growth, especially among digital players,” said
global director of business intelligence at GroupM.
Certain trends appear promising for the ad industry, GroupM said.
Although executives at some of the largest global advertisers are concerned about inflation and cost of living, their revenue has remained relatively resilient as they passed on added costs to consumers and sales held up. And though fears have swirled around a digital ad slump, GroupM said it expects advertising on digital platforms and digital extensions of traditional media to each grow by 9% globally in 2022.
“One could make the argument that we are in a global post-Covid 19 ‘war’ period marked by the after-effects of government fiscal policy and major supply chain disruptions, and not in a dot-com bubble type recession,” GroupM’s report said. “That’s why we are not seeing the universal downturn—not yet anyway—of 2008 or even 2001, despite most companies reminding us that they are proceeding with an abundance of caution.”
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