Ad spend growth tracks ahead of the economy
In our mid-year edition of the dentsu Global Ad Spend Forecasts, we predict worldwide advertising expenditure to rise by $35.8 billion to reach $754.4 billion in 2024. This 5.0% increase year-over-year is not only faster than what we observed in 2023, it also beats the pace of the global economy by 1.8 percentage points.
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New alliances reshape the media landscape
So far, 2024 has been marked by some defining new alliances and partnerships between media and tech actors as everyone tries to strengthen their market position by reaching critical mass, securing data and content licensing, or improving their solutions to advertisers.
We have seen leading TV players willing to consolidate costs and audiences to better respond to the increased competition of video-on-demand platforms, as illustrated by the plan of ESPN, Fox and Warner Bros. Discovery to launch a sports streaming service.
Others have been keen to seize the generative AI opportunities, with OpenAI partnering with publications such as El País to bring news content into ChatGPT, and Google joining forces with Reddit to bring generative AI to Reddit search and make Reddit conversations more visible across Google products.
We have also seen new alliances to build more robust advertising solutions, with, for example, Walmart bolstering Walmart Connect, its retail media offering, through the acquisition of VIZIO, the smart TV manufacturer and advertising platform.
As everyone across the industry seeks opportunities to unlock new growth, we expect this trend of forging mutually beneficial media partnerships to beat the slow economic outlook to continue in the remainder of the year.
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2024 ad spend builds upon a better-than-expected end to 2023
The first half of 2024 has also seen ad spend growing at a faster pace than previously anticipated, and we predict spend to maintain momentum in the second half of the year with major sports events such as the Paris Olympics and Paralympics just a few weeks away.
Overall, we have revised up our previous global ad spend forecasts based on improving outlooks in some of the biggest advertising markets: the United States, Japan, the United Kingdom, Germany, and France. In fact, we now expect ad spend growth to match or outpace GDP progression in all the twelve biggest ad markets in 2024.
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The Americas is forecast to be the fastest growing region of the year at 5.9%. The US market is expected to be much more dynamic, increasing by 5.9% in 2024 vs. 2.2% in 2023. The year started strongly with Super Bowl LVIII in February seeing the highest US TV ratings ever for a single-network telecast, and should end strong as the presidential election in November is forecast to add an extra $11 billion in ad spend across multiple channels. Brazil is projected to record the strongest regional growth at 8.1% thanks to high expectations for the automotive, beverages, and pharmaceuticals industries – with inflation also playing a role. Canada is developing more slowly than last year at 3.3%, with impact across multiple channels and categories due to macroeconomic concerns.
At 4.2%, growth in Asia-Pacific is faster than in 2023. China, the biggest ad market in the region, is expected to increase by 4.8% in 2024, thanks to digital advertising growing at a forecast 7.8% and now accounting for nearly 80% of the advertising market. Japan’s pace is steady at 3.1% with 8% growth in digital advertising and Australia returns to growth at 1.8% with tax cuts to be implemented from July 2024 expected to stimulate spending. India remains the most dynamic market of the region at 6.8% but is experiencing a normalization of growth rates following the post-pandemic boom. Year-over-year, ad spend growth in the Indian ad market is forecast to contract by 4 percentage points (vs. 1 percentage point slowdown in GDP growth), with low market sentiment and stagnating ad spend for usual drivers such as the India Premier League, the Cricket World Cup, and the assembly elections.
Europe, Middle East and Africa are expected to grow by 4.0% in 2024, with forecasts revised up for its three biggest markets. We predict the United Kingdom to increase by 6.0% year-over-year, with strong growth from digital ad investments that account for more than three quarters of spending. The German ad market is projected to take off as well at 3.4%, a 2.8 percentage point jump from last year thanks to surges in digital, connected TV and retail media. At 4.0% growth, France will also beat previous expectations as the strong momentum in the first quarter is forecast to continue with the Olympics in Paris predicted to add an extra €200 million in ad spend.
To uncover more insights from our investment analysts and better understand the changing media landscape, download the latest dentsu Global Ad Spend Forecasts
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9 个月Great to see growth returning.