Dentsu has predicted global ad spend to grow by five per cent this year, following “major shifts” in ad spend by geography and media channels across 56 markets with Australian spend growing, albeit slowly.
The holding company predicts that $US754.4 billion ($AU1.14 trillion) will be spent worldwide by the end of the year, marking more rapid year-on-year growth than in 2023, (which itself outperformed forecasts with 3.3 per cent growth year-over-year). The growth also beats the pace of the global economy by 1.8 percentage points.
According to Dentsu’s research, inflation-adjusted growth in the USA, China, Japan, UK, Germany, France, Australia, Brazil, India, Canada, Italy and Spain is projected at 2.6 per cent in 2024 vs. 5.2 per cent at current prices. This is because media inflation shows signs of coming down but remains high, especially for TV and sought-after digital video formats such as social video.
Will Swayne, Dentsu’s global practice president – media, said: “The year has started at a faster pace than previously anticipated, and we predict spend to maintain momentum in the second half of the year with major sporting events drawing global attention. The November US presidential election alone is forecast to account for about a third ($US11 billion or $AU16.6 billion) of the incremental ad spend in 2024.”
Dentsu expects digital to remain the fastest growing channel at 7.4 per cent and reach $US449.3 billion ($AU$680 billion) and 59.6 per cent of global ad spend.
However, it is also predicting substantial ad spend increases for retail media up 32.0 per cent year-on-year, as well as paid social (up 13.7 per cent year-on-year), programmatic (up 10.9 per cent year-on-)year, paid search (up 7.7 per cent year-on-year) and online video (up 6.7 per cent year-on-year).
Television is expected to rise in spend by 2.6 per cent but its overall share of spend is expected to contract slightly to 22.5 per cent, attracting a total $US170 billion ($AU257 billion) in billings. That growth is expected to be driven by connected TV (up 24.2 per cent), as streaming platforms ramp up their advertising offerings, and is currently enough to counter the decline in broadcast television spend (down 0.4 per cent).
Sadly, print advertising spend is forecast to continue to contract, dropping 2.6 per cent year-on-year. However, other media channels are expected to increase in 2024, with out-of-home growing by 4.2 per cent, audio by 0.4 per cent, and cinema by 4.8 per cent.
Dentsu expects the Americas to be the fastest-growing region this year, with a 5.9 per cent boost in spending, with the US expected to experience a doubling of growth at 5.9 per cent compared to 2.2 per cent in 2023.
Asia Pacific is expected to see 4.2 per cent growth — faster than the 2023 pace of 3.7 per cent. China, the biggest ad market in the region, is expected to increase by 4.8 per cent. India, meanwhile, is set to remain the most dynamic market in the region at 6.8 per cent.
Australian ad spend is expected to grow by 1.8 per cent, after a decline of 0.8 per cent in 2023, to reach $US13 billion ($AU19 billion). EMEA is predicted to grow by four per cent, with the UK, Germany and France all seeing upward revised growth figures of four, 3.4 and four per cent, respectively.
Swayne continues: “Our forecast underscores media’s importance in the world, as a sensor for changing consumer behaviour and the economic landscape. As the media ecosystem becomes increasingly digital and data-driven, there are unbounded opportunities to connect people and brands. Innovating new opportunities for brands and businesses to grow,” added Swayne.
Ken Lam, national head of investment, at Dentsu-owned media agency iProspect, said: “Ad spend is such an important indicator of broader economic health and it is wonderful to see Australia, and the broader Asia Pacific region growing despite a year of economic uncertainty. The Reserve Bank of Australia’s recent comments highlighting the stabilisation of real incomes, with growth expected later this year, which will drive growth in consumption is positive for the marketing and advertising industry. With it likely that interest rates will remain on hold for the remainder of the year, with a cut potentially on the horizon in December, there should be greater optimism for advertisers in H2 2024 with opportunities for brands to accelerate growth in a more buoyant market which will be driven by major events across EU (Euro 2024), Globe (Paris Olympics) and the US (Presidential Election) boosting advertising investments locally and globally.”
Unsurprisingly, Dentsu is predicting large growth in travel and transport sectors of 8.1 per cent as well as 6.5 per cent growth in the media and entertainment sectors due to the proliferation of content and streaming services.
