The global advertising market is now forecast by Zenith to grow by 8% this year, a downward revision from the 9.1% growth previously forecast in December. This year’s ad expenditures will be buoyed by the Winter Olympics, mid-term US elections, and soccer World Cup, per the forecast, which finds that these events will result in slower year-on-year growth in 2023 (of 5.4%).
The downgrade in outlook for this year owes chiefly to the war in Ukraine, as Zenith predicts a 26% decline in ad spend in Central & Eastern Europe. By contrast, the forecasts for ad spend growth are unchanged for North America (+12%), Western Europe (+6%) and the Middle East & North Africa (+7%). And while the prediction for Latin America has moderated slightly (down from a 9% to 8% increase), it’s improved for the Asia-Pacific region (from 6% to 7%).
Online Video Takes Over from Social As Fastest-Growing Medium
For the first time in the past decade, a medium other than social media will be the fastest-growing over the next 3 years, per the report. That medium is online video, which is forecast to increase by 15.4% on average annually between 2021 and 2024. Zenith indicates that the rapid rate of growth is partly a result of connected TV development, as connected TV viewing has become a widespread activity in the US and is also becoming established in other markets. Meanwhile, the introduction of ad-funded tiers by Netflix, with its massive global reach, will further support growth, as will continued adoption of AVOD platforms.
In the US, online video ad spend is certainly setting a strong pace, with an impressive growth rate of 50.8% last year, second only to the much smaller digital audio ad market.
Although social media is expected to trail online video in annual growth, it won’t do so by much. In fact, it’s predicted to grow by an average of 15.1% annually between 2021 and 2024, just shy of online video’s mark. By 2024, social media is expected to account for 1 in every 4 advertising dollars spent globally. Zenith notes that Meta’s share of social media ad spending outside of China peaked in 2019 at 89% and fell to 85% last year due to competition from other platforms.
Cinema and Out-of-Home to Also Show Healthy Growth
Cinema and out-of-home are projected to be the third- and fourth-fastest growing media between 2021 and 2024, with annual increases of 11.9% and 8%, respectively. Despite this growth, cinema ad spend in 2024 ($3.9 billion) will still remain well below its pre-pandemic total of $4.8 billion in 2019. Out-of-home, by contrast, is predicted to exceed the $42.3 billion it totaled in 2019 by 2024 ($45 billion). It’s off to a strong start already in the US, with growth rates exceeding 37% in each of the past 4 quarters.
It’s a different story for linear TV, which is forecast to grow by just 1.1% annually between 2021 and 2024. This increase is due to price inflation compensating for audience contraction. Indeed, the average cost of TV advertising is expected to climb by 11-14% this year, per the report, compared to a predicted price increase of 7% for online video. Separate research also finds TV advertising prices to be inflating at a faster rate than other media.
Meanwhile, Zenith calls for out-of-home and radio prices to rise by about 4% this year, for social media and other digital display prices to increase by 3% on average, and for print prices to remain the same.
Other Findings:
- Digital media is expected to account for 62% of global ad budgets this year, up from 59% last year, and rising to 65% in 2024.
- TV’s share of total global ad spending is predicted to drop from 24.6% last year to 20.8% in 2024, while online video’s share will grow from 8.8% to 11.1% during that period.
- The US will supply 57% of all additional advertising spending this year.
- India will be the fastest-growing market in relative terms, with a projected increase of 20.8% this year.
