Global advertising expenditure is forecast to grow 8% in 2022, according to Zenith’s latest Advertising Expenditure Forecasts report.
This represents a minor downgrade from the 9.1% growth rate Zenith forecast in December.
Growth will be supported by the Winter Olympics, mid-term US elections and soccer World Cup, which for the first time will take place in the most advertising-intensive period of the year in the run-up to Christmas.
Faced with this tough comparison, growth will slow to 5.4% in 2023, before the Summer Olympics and US presidential elections help boost it to 7.6% in 2024.
Zenith’s forecasts for North America (12%), Middle East and North Africa (7%) and Western Europe (6% ) are unchanged.
Latin America was downgraded slightly to 8% from 9%.
Asia Pacific was upgraded to 7% from 6%, thanks to a strong performance from India.
Severe disruption in Russia and its closest trading partners after the invasion of Ukraine will lead to a 26% decline in ad spend in Central and Eastern Europe, even though most other markets in the region will continue to grow.
Zenith: "Adspend has remained on track despite the macroeconomic headwinds that emerged this year.
"High inflation, concentrated in essentials like heating, petrol, and food, is forcing consumers to reprioritise their spending, particularly the less well-off, and has led to a drop in consumer confidence.
"But for now, consumer spending continues to grow, as consumers demonstrate their strong appetite for the travel and entertainment experiences that were denied to them over the pandemic.
"Business confidence is generally high, and corporate investment is rising, and there is little evidence of widespread cost-cutting."
Online video is now predicted to be the fastest-growing channel over the next three years.
Zenith forecasts it will grow 15.4% a year on average between 2021 and 2024, driven by the rapid development of connected TV, ad-funded video-on-demand, streaming and other video formats.
Connected TV is now a mainstream video platform in the US, with a higher penetration than cable TV, and is becoming established in other markets, especially in Western Europe and Asia Pacific.
The introduction of cheaper ad-funded tiers by SVOD services like Netflix and Disney+ will boost growth further by providing new high-quality environments for brand communication.
Mixed video-on-demand models that combined subscriptions with advertising will also help online video audiences continue to grow across the world by recruiting consumers unwilling or unable to afford the growing roster of subscription-only services. Zenith expects online video ad spend to rise from US$62 billion in 2021 to US$95 billion in 2024.
Online video will overtake social media, the fastest-growing channel for the previous nine years. Social media adspend (which includes video ads in social media feeds) is still forecast to grow at an average rate of 15.1% a year between 2021 and 2024, propelled by rising competition among platforms that is driving continued innovation on formats and closer integration with commerce.
Zenith forecasts social media ad spend will rise to US$187 billion in 2022 from US$153 billion in 2021, when it will account for 25% of expenditure on advertising across all media.
Cinema , growing 11.9% between 2021 and 2024, and out-of-home (8%) will take third and fourth place among the fastest-growing media.
They have ground to make up from losses they suffered when cinemas were closed, and consumers were confined indoors.
Many brands forced to find alternatives, often digital, have found them effective, and see little need to shift their budgets back.
Zenith expects cinema ad spend to reach US$3.9 billion in 2024, well below its pre-pandemic level of US$4.8 billion in 2019, while out-of-home will reach US$45.0 billion in 2024, exceeding the US$42.3 billion in 2019.
Linear television advertising is forecast to grow by 1.1% a year on average between 2021 and 2024, to US$179.2 billion from US$173.6 billion, as price rises continue to compensate for loss of audiences.
Zenith: "This ongoing decline in reach and efficiency will drive brands to digital channels, however, including online video."
Television’s share of total adspend is forecast to fall to 20.8% in 2024 from 24.6% in 2021, while online video’s share increases to 11.1% from 8.8%.
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