Connect with us


Global ad market to grow 8% in 2022

Global advertising expenditure is forecast to grow 8 per cent in 2022, according to Zenith’s latest Advertising Expenditure Forecasts report.

This represents a minor downgrade from the 9.1 per cent growth rate Zenith published in December 2021. 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 per cent in 2023, before the Summer Olympics and US presidential elections help boost it to 7.6 per cent in 2024.

Zenith’s forecasts for North America, MENA and Western Europe this year are unchanged at 12 per cent, 7 per cent and 6 per cent growth respectively. Latin America was downgraded slightly from 9 per cent to 8 per cent, but Asia Pacific was upgraded from 6 per cent to 7 per cent, thanks to a very strong performance from India. Severe disruption in Russia and its closest trading partners after the invasion of Ukraine will lead to a 26 per cent decline in adspend in Central & Eastern Europe, even though most other markets in the region will continue to grow.

The report further says ad spending 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.

However 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.

India to lead growth with 21 per cent expansion this year.
Global adspend is forecast to increase by USD 58 billion in 2022, rising to USD 781 billion from USD 723 billion in 2021. Most of the new ad dollars will come from the US, which is forecast to expand by USD 33 billion in 2022, driven by continued, rapid digital transformation, accounting for 57 per cent of all the money added to the ad market this year.

China, Japan, and the UK come next, supplying 9.1 per cent, 6.2 per cent, and 5.8 per cent of new ad dollars, respectively. India is in fifth place, accounting for 4.6 per cent of the growth in adspend this year, even though it is only the twelfth-largest ad market.

India will be the fastest-growing market in percentage terms, expanding by 20.8 per cent, driven by election advertising and the resumption of festivals that were cancelled at the height of the pandemic.

Jai Lala, CEO, Zenith India said, “India continues to have a robust adex growth on the back of Digital and TV. Key categories continue to be led by FMCG and the new app-based clients in the area of Fintech, Edutech, Food tech amongst others.”

Higher prices in traditional channels accelerate the shift to digital alternatives
The sustained growth in demand from advertisers is pushing up media inflation, particularly in television, where the supply of audiences is falling steadily as viewers switch to alternatives. Price rises vary widely for different audiences in different countries, but the global average cost of television advertising across all audiences is expected to rise by 11-13 per cent this year.

Online video prices are expected to increase by about 7 per cent, although in this case the supply of audiences is rising. Other digital channels where supply is climbing and volumes are flexible are inflating only modestly, with 3 per cent average price rises forecast for social media and other digital displays.

Out-of-home and radio prices will go up about 4 per cent this year, while print prices will remain stable because demand for advertising in printed publications is falling as rapidly as readership.

Zenith also predicts 62 per cent of ad budgets will be spent on digital media in 2022, up from 59 per cent in 2021, and that this proportion will reach 65 per cent in 2024.

“In a world where trading is becoming dominated by auctions, competitive advantage is achieved not by scale, but by data,” said Ben Lukawski, Global Chief Strategy Officer, Zenith. “Inflation will hit cheap reach buyers hard, but brands that make smart use of their data will manage costs and grow their business at the same time.”

Online video overtakes social media as the fastest-growing channel for the first time in past decade
Online video is now predicted to be the fastest-growing channel over the next three years: Zenith forecasts it will grow 15.4 per cent 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. Zenith expects online video adspend to rise from USD 62 billion in 2021 to USD 95 billion in 2024.

“Online video is growing by creating new opportunities for building brand awareness, complemented by social media’s capacity for cost-effective targeting with low barriers to entry,” said Jonathan Barnard, Head of Forecasting, Zenith. “Online video is steadily narrowing the spending gap with television, and will be half as large as television by 2024,” he added.

Click to comment

You must be logged in to post a comment Login

Leave a Reply

Copyright © 2023.Broadcast and Cablesat

error: Content is protected !!