Australia’s advertising market will grow marginally slower at 3.2% in 2023, according to the latest dentsu Global Ad Spend Forecasts report.
Craig Cooper, chief investment officer, Carat Australia, says dentsu’s mid-year ad spend forecast for 2023 in Australia has been marginally lowered to 3.2% growth due to a softening in the economic outlook.
Australia’s CPI inflation rose to a 32-year high in the calendar year to December 2022, driven largely by sharp price increases on cost of essentials driven by supply shortages.
This set off further interest rate rises and has escalated cost of living pressures on households.
“While market volatility was expected to impact the first half of 2023, we are forecasting Q3 and Q4 to be positively impacted by the stabilisation of client marketing budgets and of both 2 local and global sporting events including the AFL and NRL finals, the FIFA Women’s World Cup and Rugby World Cup,” says Cooper.
Global advertising spend expected to grow by 3.3% in 2023 with inflation driving increase to reach US$727.9 billion.
However, stronger growth is ahead, with 2024 global advertising market now expected to increase by 4.7%, to reach US$762.5 billion, with a further 3.8% growth into 2025.
Peter Huijboom, global CEO of media international markets at Dentsu, said that the industry has pivoted towards digital for years, more than doubling investment in the last five years, thanks in part to the almost unlimited potential to reach, engage and sell to individual consumers.
“It has been one of the big drivers for growth, but with finite marketing budgets available to brands – it’s clear we are now starting to reach a point of digital maturation within the campaign mix alongside more traditional channels," said Huijboom.
“There are still some markets, for example India where the digital potential is in its adolescence, who continue to see rapid growth in digital spending – contributing to the global uplift.
“But it is also through innovations in tech, updated platforms, new channels and changes in planning behaviours, we’ll retain this consistent growth within digital investment worldwide."
Digital spend is expected to reach US$424.3 billion by the end of 2023, accounting for 58.3% of all advertising spend, this will increase further to 59.1% share in 2024 and 60.3% in 2025.Emerging digital categories are expected to continue to experience high growth in 2023, such as retail media (18.0%) and connected TV (15.2%).
The preference for programmatic buying is also on the up, with advertising spend transacted programmatically forecast to increase by 14.4%, to reach 71.4% share of digital spend in 2023.
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