The latest dentsu Global Ad Spend Forecasts, covering 58 markets across the globe, shows advertising spend will expand by $33.0 billion in 2024 to reach $752.8 billion.
This represents a 4.6 per cent growth year-over-year for the ad industry – much faster than the pace seen in 2023 (+2.7 per cent vs. 2022). However, media price inflation continues to have a significant influence on growth, with global advertising spend at constant prices projecting a 2024 increase by only 2.5 per cent, when compared to 2023 spending.
Digital is also expected to follow an upward trajectory to reach $442.6 billion in 2024, representing 58.8 per cent of global advertising spend. The slowdown to single-digit growth first observed in 2023 (6.3 per cent) is forecast to continue in 2024 (6.5 per cent) and to become the norm over the next years: 6.3 per cent three-year compound annual growth rate (CAGR) to 2026. Yet, digital is expected to continue to be the main driver of global ad spend growth and capture the most incremental ad dollar investments, with an additional $27.1 billion spend next year.
The report shows that in 2024, significant media opportunities arise for advertisers from major cyclical sporting and political events such as UEFA EURO2024 and the US presidential election, driving increased investments both at a market and international level.
The free bi-annual dentsu Global Ad Spend Forecasts report, examines real-time financial data from around the world, identifying major shifts in ad spend by media channel, by sector and by geography. Additionally, this report also explores two new comparisons for brand leaders, enabling them to consider ad spend in relation to wider macro-economic factors such as market demographics and Gross Domestic Product (GDP).
“Despite the current worldwide geo-political instabilities and economic outlook, in 2024 we can see how significant major political and sporting events are for creating positive growth in ad spend. But overall spend is just one of the metrics we need to consider, so for the first time, we have conducted a deep dive analysis into market GDP and population as new alternative ad spend benchmarks for our clients,” said Will Swayne, global practice president – media at dentsu.
“We’re excited to share our latest dentsu global ad spend forecast for 2024, which predicts moderate growth for Australia and APAC driven by continuing growth in Travel, Automotive and Food and Pharmaceutical, as well as bounce back in the Retail, Finance and Technology sectors. Whilst locally, we have seen a relatively strong 2023 so far with total ad spend back only 2 per cent Jan-Oct YTD from a record year in 2022, despite a year of economic uncertainty. With the latest news from RBA to pause interest rates in their final meeting this year, there should be optimism for advertisers heading into 2024, and a great opportunity for brands to accelerate growth through opportunities in emerging tech like AI, advancing automation and digitalisation capabilities to maximise performance, effectiveness and outcomes,” said Ken Lam, iProspect Australia national head of investment.
Dentsu analysis shows in 2024, advertising spend is forecast to represent, on average, 0.75 per cent of the gross domestic product (GDP) of the countries tracked*, which is consistent with the average annual ad spend/GDP indicator observed in the last 20 years (0.70 per cent). With some markets contributing considerably more, for example; advertisers in Japan (1.26 per cent), the United Kingdom (1.23 per cent) and the United States (1.13 per cent) spending much more than those in other markets relative to their GDP.
Additionally, the report demonstrates that in 2024, advertisers will spend, on average, $139 per capita across the world. It is about 75 per cent more than what they spent 20 years ago ($80). Beyond showing that advertisers are spending more to attract audiences, the ad spend per capita indicator also shows the growing ad pressure faced by audiences.
“Audiences are receiving an increasing volume of ads, so finding new ways to drive ad effectiveness has never been more important. We are seeing an increased focus on planning and buying for attention, over pure reach, as more brands seek to maximize their return on investment and capitalize on the attention economy tools available to them,” said Swayne.
From a channel perspective, the 2024 dentsu Global Ad Spend Forecasts outlook indicates that in the digital space, retail media investments will accelerate the fastest with a 17.2 per cent three-year CAGR, followed by paid social investments (12.3 per cent three-year CAGR). Programmatic channels, which already account for more than 70 per cent of digital ad spend, are also expected to continue growing by double-digits (10.2 per cent three-year CAGR).
Following two consecutive years of declining ad spend, TV is predicted to return to growth (2.9 per cent) and capture 23.0 per cent of ad spend in 2024. Connected TV is forecast to experience a rapid 30.8 per cent growth, almost twice as fast as 2023 growth (15.9 per cent), as major video platforms launch or refine their ad offering.
Other media are expected to account for a 18.2 per cent share of advertising spend in 2024. All will grow (cinema by 6.4 per cent, out-of-home by 4.4 per cent, audio by 1.1 per cent), barring print which will contract by -3.3 per cent.
Advertising spend is expected to grow across all regions. The Americas, the largest region in terms of ad spend, is forecast to overtake Asia-Pacific as the most dynamic with 5.8 per cent growth in 2024, which is significantly greater than the 2.5 per cent growth it experienced in 2023. Advertising spend in the region is expected to accelerate the fastest until at least 2025 (4.8 per cent growth). Asia-Pacific is predicted to grow by 4.0 per cent in 2024 (+0.5 percentage point vs. 2023), and EMEA by 2.7 per cent growth (+0.8 percentage point vs. 2023).
Whilst the first quarter will be the slowest of the year (4.2 per cent), growth is forecast to accelerate in the second quarter (4.9 per cent) before peaking during the third (5.5 per cent), supported by major sports events. Two sectors in particular are forecast to grow at a much faster rate than the global average: travel and transport (7.5 per cent) and pharmaceutical (7.4 per cent).
