*This article is reprinted from DIGIDAY+, a paid service of DIGIDAY[Japanese version]for next-generation leaders responsible for branding.
With some parts of the world hit by deep recession and others still searching for a path to growth, many economic forecasters say 2023 will have a rough start but a happy ending. , says it will either continue to be sluggish.
If you ask analysts at major holding company media agencies, specifically GroupM and Magna, the long-term outlook isn’t great, but the strong 2022 results suggest that For 2023, it remains more optimistic, albeit somewhat more conservative.
Growth rate revised downward
Kate Scott-Dawkins, GroupM’s global director of business intelligence, said in the network’s latest report earlier this month, “Recent news headlines point to big tech bankruptcies and a downturn in digital advertising. Despite the caveats, we expect both forms of digital advertising – both pure digital advertising and the digital equivalent of traditional media – to see double-digit growth in 2022.”
GroupM cut its global ad growth rate for 2022 to 6.5% (excluding political ads in the US) from 8.4% announced in June. Scott-Dawkins attributed the decline mainly to slower growth in China, with GroupM forecasting an eventual 8.1% growth in 2022 excluding China.
As for 2023, GroupM forecasts global advertising growth of 5.9%, with Scott-Dawkins citing fast-growing markets like connected TV, retail media and India. . However, this forecast is down from 6.4% in June.
IPG’s Magna division forecasts global media revenue growth of 6.6% in 2022, down from 9.2% in June. The outlook for 2023 is also a bit more conservative, revising global growth to 4.8% from 6.3%. Magna, like GroupM, attributes much of the revision to a turbulent China that has turned the clock back big and stunted growth with its restrictive COVID-19 policies and stringent digital regulations. .
“Ad spend is slowing down a bit, but it’s more or less what we expected before,” said Luke Stillman, senior vice president and group director of global market intelligence at Magna. (Dawkins said China, together with the U.S., accounts for more than 55% of all ad spending, so it has a significant impact on global affairs.)
OOH grows faster than expected
As expected, 2022 saw massive layoffs for several major platforms due to lower-than-expected revenue growth, increased government scrutiny of TikTok, and Twitter’s turmoil under new owners. So much of the growth continues to be digital, even after some obstacles have been hit.
Magna expects digital to grow 8% in 2023, or 65% of total ad revenue. This will be driven primarily by the explosive growth of e-commerce and digital video. Search remains strong, and we expect social to recover from some of the obstacles mentioned above.
Perhaps the biggest surprise of all media is the expected growth rate of out-of-home (OOH) media. Out-of-home advertising continues to grow at a faster pace than any other non-digital medium due to the shift to digital media. GroupM expects outdoor advertising to grow 18.1% (outside of China) in 2022, better than any traditional media.
Similarly, Magna forecasts outdoor advertising growth of 12.4% in 2022, up from its June forecast of 10.4%.
That bullishness is reflected in the third-quarter 2022 revenue figures announced on December 5 by the Out-of-Home Advertising Association of America (OAAA), the outdoor advertising industry group. is also shown. Out-of-home advertising will grow 25.7% from 2021, matching $6.4 billion in revenue in 2019, according to the data.
“Major sectors are investing more and more money, especially political spending on outdoor advertising, which hit a record high,” said OAAA president and CEO Ana Berger. Other categories such as media and advertising, broad public transportation, hotels and resorts have contributed to the growth of outdoor advertising. Nearly a third of the top 100 outdoor advertisers have doubled their outdoor advertising spend, according to OAAA.
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(Text: Michael Bürgi, Translation: Satomi Fujiwara/Galileo, Editing: Shohei Wakeshima)
Source: BusinessInsider
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