Posted by Brand Safety Institute • Mar 30, 2023 5:58:13 PM
MAGNA Global, IPG Mediabrands intelligence and investment strategy group, has predicted that while global ad spend will slow down in 2023, digital will be the main driver in the growth we see.
As reported by Axios:
The 2023 ad market is expected to grow 3.4% this year, down from the 3.7% that Magna predicted in December. That figure accounts for the absence of cyclical events, like the U.S. elections and the Olympics.
- Still, the ad market will reach a record high of $326 billion this year, thanks in large part to huge growth in over-the-top, or streaming, ads as well as short-form mobile video ads that run on platforms like TikTok and Instagram.
- "All of the digital formats provide innovation that's increasingly attractive to brands," Létang [Vincent Létang, EVP Global Market Intelligence at MAGNA] said.
Axios continues, explaining that digital advertising being the main driver of market growth:
The advertising market typically grows at roughly the same rate as the GDP. But even during COVID, when both supply and demand for many goods were restricted, the ad market didn't completely crater the way it did during the 2008 financial crisis, Létang notes.
- Digital growth, fueled by new mediums like streaming and short-form video, has helped offset slower growth in television and radio advertising.
...and will continue to be.
Looking ahead, Magna predicts that the market will start to show signs of improvement in the second half of the year, which will make up for the minimal to flat growth in the ad market in the first two quarters.
- The rise of e-commerce advertising, driven by consumer package goods brands shifting their retail marketing budgets toward digital advertising from in-store placements, will help fuel digital ad growth organically, in addition to the growth in streaming advertising.
Forbes takes the same forecast and reported more of the numbers.
For the year, growth will come from digital media which is expected to increase by 9%. Conversely, linear media ad dollars are projected to decline by -4%.
Magna notes, among the faster growing media segments will be search led by Google, e-commerce led by Amazon and retail media networks. The ad dollars for these platforms are forecast to increase by 10% in 2023 (compared to +14% in 2022) and will total $125 billion, more than any other ad format. Helping to fuel this increase will be the CPG category.
Social media outlets led by Facebook, Instagram and TikTok are forecast to generate $66 billion in ad spend for the year, a 6% increase. In 2022 social media ad dollars grew by a more modest 2% caused by data targeting restrictions and a maturing audience.
You can read the Forbes article here.