Advertising spend will grow at 1.8% to $US13 billion in Australia this year, a slower rate than previously expected, according to the latest forecasts by dentsu.
The rate is an improvement from the fall of 0.8% in 2023, according to a mid-year update in the dentsu Global Ad Spend Forecasts.
However, the 1.8% is a downgrade from the 2.3% forecast made at the end of 2023.
Dentsu sees a brighter second half of 2024.
Most analysts had expected a quiet start to the year, with a pick up in the second half, but it proved slower than most forecasts, with media players across the local market reporting a short market.
“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,” said Ken Lam, national head of investment, iProspect.
“The Reserve Bank of Australia’s recent comments highlighting the stablisation 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.”
The latest forecasts show advertising spend up by 5% to $US754.4 billion globally in 2024.
This increase is more rapid than the 3.3% in 2023 and also beats the pace of the global economy by 1.8 percentage points.
“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,” said Will Swayne, global practice president - media.
“The November US presidential election alone is forecast to account for about a third ($11 billion) of the incremental ad spend in 2024.”
Digital is expected to remain the fastest growing channel at 7.4% to reach $US449.3 billion and 59.6% of global ad spend.
Substantial ad spend increases are forecast for retail media (+32%, 17.7% three-year CAGR to 2026), paid social (+13.7%), and programmatic (+10.9%), while paid search (+7.7%) and online video (+6.7%) to maintain strong growth.
Television, with its share of spend is predicted to slightly contract to 22.5%, is forecast to rise by 2.6% and attract $170 billion in investments in 2024.
Growth is driven by spend in connected TV (+24.2% ), as streaming platforms ramp up their advertising offerings, and is currently enough to counter the decline in broadcast television spend (-0.4%).
While print advertising spend is forecast to continue to contract (-2.6%), the other media channels are expected to increase in 2024, with out-of-home growing by 4.2%, audio by 0.4%, and cinema by 4.8%
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