Australian media spend will remain flat this year with just 0.2 per cent growth expected, compared to a global average of 5.9 per cent, according to GroupM.
The company announced the disappointing news with its twice-yearly This Year Next Year reporting looking into global media spend forecast and trends.
However, while global growth is set to reach almost six per cent, the WPP-owned media investment group noted that this falls below inflation and represents an overall decrease in ad spend — excluding US political advertising.
The firm did say that there would be “pockets” of growth in Australia. Online shopping digital advertising, for example, is expected to grow by more than a third in 2023 while total digital and out-of-home (OOH) advertising are expected to grow by 3.6 per cent nine per cent, respectively.
Cinema revenues are projected to grow by 10.1 per cent and magazines (including digital extensions) will surge by 10.4 per cent in ad spend. This year will be the first growth period for the format in more than a decade. Newspapers, on the other hand, will decline by 13.3 per cent.
Total audio, meanwhile, will fall by 3.3 per cent, despite the industry remaining bullish around the opportunities in podcasting and streaming. Those latter formats will see 12.8 per cent growth.
“2023 is delivering the expected challenge of tougher economic conditions. The impact of higher interest rates, rising energy costs and the increased cost of living are contributing to a flat market forecast for the year,” said Melissa Hey, GroupM’s chief investment officer.
“While 2023 has started slower than anticipated, there are pockets of growth including BVOD, podcasts and streaming. Digital continues to see growth, and retail media remains a bright spot on the horizon driven by increased players, greater innovation and changing consumer behaviours. While the cost-of-living increases may continue to impact consumers in the second half of the year, the marketing lessons from previous downturns remain the same: the brands that maintain a consistent market presence through advertising gain an extra share of voice and consumer trust.”
Around the world, GroupM predicts that connected TV will see a 10.4 per cent growth in ad spend between 2023 and 2028 on a compound annual basis. The group also noted that consumer spending on subscription video-on-demand (SVOD) represents between a fifth and a third of total video spending in major markets, leaving plenty of room for growth in subscriptions.
Retail media is also continuing to grow and is the third-fastest growing channel this year behind digital OOH and CTV. GroupM said that it expects retail media to grow by 9.9 per cent to reach US$125.7 billion this year and will exceed TV revenue (including CTV) in 2028.
