MAGNA Global Ad Forecast Recommends Continued Innovation and Spending Going Forward

These questions and more are answered in the latest Global Ad Forecast authored by MAGNA39s Vincent Letang Executive Vice President Global Market Intelligence Fielded four times a year in the US and twice a year globally the report forecasts global ad spend across 70 markets using historical ad revenue from media owners39 financial reports or local media trade organizations such as the OAAA and TVB and ad spend forecasts that are based on the macroeconomic outlook and the competitiveness of each media formatAccording to Letang media owners39 advertising revenues are predicted to reach 842 billion a 46 growth over 2022 which suffered during its last six months quot2022 started strong but the second half was very weakquot he explained quotThe first half of 2023 was flat year over year generally speaking 14 but improved globally due to China 6 Spain and Italy both 3 The US was essentially flat at 1 while Germany and the UK were down slightly at 05quot In terms of industry verticals and media types quotretail media and social helped drive growth in the first quarterquot he addedFor the US specifically 2022 was an unusual year with the midterm elections and Olympic games adding incremental advertising dollars If you take those two factors out of the equation the US is projected to grow 42 in 2023 compared to 25 with those cyclical events included in the totals according to LetangGlobally quotthe largest growth market is India for the third consecutive year at 12 India is consistently the fastest growing economy and the fastest growing advertising market globally ahead of China which slowed down considerably last year because of Zero Covid public policy The moment the Zero Covid policy was removed in December 2022 the economy started to reaccelerate We expect China to grow 8quot he assertedLetang shared that digital remains the fastestgrowing media format spurred by Search 10 which includes the small but fastgrowing retail media networks Amazon accounts for much of this growth but other retailers such as Walmart are improving their digital offerings as well Yet for traditional media global ad revenue is projected to shrink by 3 with traditional television off 5 and publishing off 4 The bright spots are outofhome up 5 and cinema 23 which are benefiting from a consumer surge postCovidFor publishers that are lagging in growth Letang recommended that quotthey continue to innovate amp8230 and they do to be fair For television for example while the majority of revenues still come from traditional commercials a growing portion now comes from AVOD and addressable spots We find that depending on the market the average growth is about 10 for television for these new and alternative ad formats served on CTV for example But currently this growth is not enough to offset the declines that traditional ad formats such as linear TV continue to experiencequotFor Letang quotthere is not much that media owners can do in the short term when the economy is tough They must however continue to innovate because in the long term it will pay offquot A great example of the positive impact of innovation is in outofhome quotwhich has been and still is one of the most dynamic media formatsquot as the channel continues to develop its digital capabilities with dynamic insertions and improvement in data collection quotAbout 30 of outofhome revenue is generated by digital units digital billboards in airports or train stations and subways up from 10 maybe ten years agoquot he said In addition both outofhome and cinema are benefiting from a return to preCovid behaviors as more people are on the street exposed to billboards and returning to movie theaters quotIt39s not back to preCovid levels but depending on the country it is back 5070quot he noted regarding cinemaWhat can advertisers do to spur growth at a time when future budgets might be constrained quotSometimes there is a tendency for marketers with flat or lower budgets to invest in low funnel channels like search because that is where you can best measure campaignsquot Letang said quotIt feels safer But it is very risky to deprioritize upper funnel channels like television or radio because you lose share of voice to competitors and ultimately you lose market sharequotIn the long term it costs you more to rebuild your share of voice Don39t be silent Continue communicating to customersquot he concludedClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillageorgMyersBizNet

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MAGNA Global Ad Forecast Recommends Continued Innovation and Spending Going Forward

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Charlene Weisler

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MAGNA Global Ad Forecast Recommends Continued Innovation and Spending Going Forward

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