- Global promoting spending is projected to increase 4.6% in 2024 to reach $752.8 billion, a rate of growth above what the industry experienced in 2023, according to the most recent Dentsu forecast.
- However, the agency network cautioned that media pricing inflation is likely to be clouding the image next 12 months. When tracking global ad spending at constant prices, 2024’s growth lands at around 2.5% versus the two.7% growth seen in 2023.
- Digital will proceed to drive momentum, commanding $442.6 billion, or 58.8%, of the ad market in 2024. But the channel, which recently hit a single-digit rate of growth for the primary time, will remain on a slower upward trajectory in 2024 (up 6.5%) and beyond.
Dentsu joins other agencies in priming 2024 to be a stronger period of promoting growth, with some key qualifiers. Much of next 12 months’s optimism is pegged to major cyclical events that would provide a lift for beleaguered marketers, including the Olympics, UEFA Euro 2024 football championship and the U.S. presidential election. Overall, 2024’s rate of growth appears to be higher than this 12 months’s, but that’s only when factoring in media pricing inflation.
Given the nuances in analyzing today’s market, Dentsu for the primary time has expanded its research to include metrics like gross domestic product (GDP) and population in relation to ad spending. Advertising in 2024 is anticipated to make up 0.75% of GDP, on average, among the many countries tracked by the agency. That figure is barely above the historical average, but some regions make up an outsized portion of ad spending, including Japan, the U.K. and the U.S.
Brands also face increasingly higher costs to reach individual consumers in a highly fragmented media landscape. Advertisers next 12 months will spend $139 per capita at the worldwide level, a roughly 75% increase from 20 years ago, according to Dentsu.
“Audiences are receiving an increasing volume of ads, so finding latest ways to drive ad effectiveness has never been more essential,” said Will Swayne, president of Dentsu’s global media practice, in a press release. “We are seeing an increased concentrate on planning and buying for attention, over pure reach, as more brands seek to maximize their return on investment and capitalize on the attention economy tools available to them.”
The need for precision could help explain why digital now accounts for over half of the full promoting pie. Among digital channels, retail media will speed up the fastest in 2024 with a 17.2% three-year compound annual growth rate, a lift potentially resulting from the deprecation of third-party cookies, a mainstay ad-targeting method. Retail media shall be followed by social media at a 12.3% three-year CAGR and programmatic media with a ten.2% three-year CAGR. Programmatic already accounts for greater than 70% of digital investments, although scrutiny of the tactic has been on the rise as research reveals that a big chunk of spending is wasted on nonviewable inventory and clickbait web sites.
Contrasting with some agency peers, Dentsu believes TV will return to growth in 2024 with a 2.9% gain, potentially reflective of events just like the Olympics. Connected TV is forecast to nearly double its growth from 2023 to 30.8% as streamers launch and refine their ad-supported businesses. Amazon Prime Video will introduce commercials to its service starting in Q1, while rivals like Netflix and Max are ramping up their brand deals. IPG’s media investment arm Magna, recently sharing its own 2024 estimates, said that Amazon’s larger crack at promoting shall be a “game changer” for the category at large.
Read the total article here
