The advertising marketing in Australia will dip in 2023 but still grow by 5% to $ 23.5 billion, according to the latest forecasts by MAGNA.
Digital advertising will again lead the way, up 9%. While this is not as strong as this year in 2022, it represents two-thirds as much incremental digital ad spending.
Globally, MAGNA expects media owners’ advertising revenues to grow 5% in 2023 to reach $US830 billion. This is a slowdown from 7% in 2022 and 23% in 2021.
Advertising spending slowed down in the second half of 2022 because of economic uncertainty and issues affecting digital advertising formats, but traditional editorial media managed to grow
The new 2023 forecast is 1.5 percentage point below MAGNA’s previous outlook published in and is due to a deteriorating macroeconomic outlook.
“2022 was a strong year for ad growth in Australia as a whole," says Lucy Formosa-Morgan, CEO MAGNA Australia.
"With so many global and local pressures (Russia’s invasion of Ukraine, China’s COVID zero tolerance stance impacting manufacturing, inflation, seven interest rate rises, etc.) impacting consumers, we do envisage that consumer spending will start to reduce in the new year and as such we are forecasting that total ad spend for 2023 will be low single digit growth with only a handful of channels showing growth.”
Australia’s advertising market grew by 8% in 2022 to reach $A22.3 billion.
Digital advertising spending was up 9% this year to $A16.2 billion. This represents 72% of total ad spending.
This is only behind the China, Canada, Norway, Taiwan, Sweden, and the UK, for highest share of digital advertising budgets as a percent of total ad spending.
Growth is led by mobile advertising spending, which will increase by +12% to $A11.2 billion. By format, search (+12%), video (+12%), and social media (+7%) are leading the way.
Linear advertising formats grew by 3% this year to reach $A6.2 billion. This follows 2021’s +14% growth for linear advertising sales and represents 95% of the pre-COVID linear ad spending total.
However, MAGNA says with television is expected to continue eroding, and print continue its long decline, linear ad spend will never reach the pre-COVID highs in Australia.
Linear Television set to shrink by 2% in 2022, despite a relatively strong December half buoyed by the Federal Election and political party spend, and the return of Travel and Entertainment categories fuelling demand post the 2021 lockdowns.
The June half expenditure dragging, with the additional note on YOY comparisons with 2021 Olympics, and the 2021 Q3 lockdowns in key markets skewing spend to TV. Erosion is expected to continue in 2023, forecast down -7%, as viewing continues to shift from linear television to digital formats.
Other linear formats expanded this year (radio +10% to $A687 million, out of home +23% to $A 1.1 billion), but print will continue its decline (-3% to $A423 million).
Australia's position in the ad spend league table:
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