GroupM’s annual mid-year forecast paints a bleak picture for adland as economic uncertainty “casts a shadow“ over consumer spending and advertising budgets.
Total ad spend is forecast to grow by 1.1 per cent, which is better than 0.6 per cent rise in 2023. GroupM does not believe that the Paris Olympics and federal elections will deliver incremental shots in the arm for media owners, but rather divert spend between media owners.
Most channels will endure cuts to spend except for out of home (up 7.3 per cent to $1.25 billion) retail media (forecast to grow by 28.6 per cent to $1.16 billion) and digital media (up 4.2 per cent to $11 billion).
In fact, digital biddable media represents 76 per cent of ad spend in 2024, and search has the biggest share of 37 per cent of digital media. Within digital, search is forecast to grow by 2.6 per cent and other digital, including social media will lift 2.8 per cent with strong investment from Chinese online retailers Temu and Shein. Retail media is powering a large proportion of digital ad spend.
Linear TV is forecast to decline 13.3 per cent in 2024 to $2.85 billion while Video-On-Demand will grow by 15.3 per cent, helping total TV dip by 9.5 per cent to $3.43b. CTV’s share of TV is 16.9 per cent, although is forecast to rise to 21 per cent in 2025 and 43.5 per cent in 2009, fuelled by growth in BVODs and new streaming ad tier players in Paramount+, Amazon Prime and Disney+.
Box office declines for cinema this year has seen its ad spend downgraded to +2.6 per cent to reach $117m while audio is expected to remain relatively flat at -0.1 per cent ($ 1.24 billion), in spite of 16.4 per cent growth for digital audio, which includes podcasts and streaming.
Total print ad revenue is predicted to decline by 10.2 per cent this year, but then plateau to declines of 1.5 per cent in 2025.
“Economic uncertainty is front of mind for consumers, advertisers and politicians and continues to cast a shadow in Australia for the year ahead, but there are bright spots in the landscape,” GroupM ANZ chief investment officer Melissa Hey said.
“Despite the economic challenges it’s positive to see growth in the year ahead. Based on the current economic conditions, we’re expecting overall ad revenue to increase 1.1 per cent across 2024 to $23.5b before stronger growth returns in 2025.
“Retail Media is seeing accelerated growth, solidifying its position as a primary growth engine for brands, Podcasts and Streaming continue to drive growth in Audio, while the decline of Linear TV is slowing.”
Aussie Market Lags Behind Global
Aside from retail media, the Australian advertising market is lagging in growth across most channels globally.
Globally, Total TV, including both linear TV and its digital extensions, is expected to grow 2.7 per cent to $163.2 billion in 2024, while OOH advertising is predicted to grow by 11.5 per cent.
Digital pure-play advertising will make up 70.6 per cent of total revenue in 2024, equaling $699 billion. By 2029, digital will make up 74.9 per cent of total advertising revenue, or $985.6 billion.
Within digital, the largest five companies (Google, Meta, ByteDance, Amazon and Alibaba) accounted for 77.7 per cent of the total in 2023, up from 65.0 per cent in 2016.
Other Digital (including social media and social video) is expected to grow 9.9 per cent to $342.9 billion, but will then decelerate to to 7.5 per cent in 2025.
Retail media is predicted to represent 15.1 per cent of total ad revenue in 2024, up from just 1.5 per cent a decade ago. The channel remains the fastest growing segment of digital, forecast to grow 17.5 per cent in 2024 and 13.5 per cent in 2025.
GroupM expects CTV ad revenue to grow 20.1 per cent to $38.3 billion in 2024 versus the $33.2 billion we forecast in December 2023 (using our new methodology).
Machine-Generated Content could be 10 per cent or more of total content-driven advertising by 2029, up from an estimated 2 per cent in 2024.
GroupM estimates 69.5 per cent of revenue will be informed by AI in 2024, reaching 94.1 per cent by 2029, three years earlier than previously forecast.
