Global ad spend forecasts: digital now makes up majority of overall spend worldwide

Soaring media price inflation, geopolitical tension, key elections and the FIFA World Cup are accelerating brands' reliance on data and digital channels to navigate an uncertain world in 2022 and beyond.

Advertising investment is forecast to grow by 8.7% worldwide in 2022, and by another 5.4.% the following year, according to the latest dentsu Global Ad Spend Forecast report.

The twice-yearly report which combines data from close to 60 markets globally, anticipates $738.5bn will be spent globally in its July ‘reforecast’.

Significantly, digital channels such as search, social and connected TV, are now driving brand focus, with 55.5% of overall 2022 ad spend, which is valued at $409.9bn.

The Americas have been identified as the top advertising spend region for 2022, whilst the fastest growing markets will be India, US and Brazil, the report finds.

The reforecast of media investment is released in the context of escalating media price inflation, geopolitical tension, upcoming key elections, and one of the most anticipated global sports events of the year, the FIFA World Cup.

Excluding Russian investment to avoid data distortions

Due to continued uncertainty, the current and historical comparison data has also been adjusted in the report to remove Russian investment from the forecast, to better reflect the rest of the international ad spend trends and predictions.

Peter Huijboom, Global CEO, Media and Global Clients, dentsu international said: “Even with everything which has happened in recent months, not least the protracted war in Ukraine and its international repercussions, the advertising recovery remains strong on a global scale. And, despite factors such as inflation putting pressure on household budgets, combined with 2021 being a tough comparative year, we have only marginally revised down our 2022 growth forecast by just 0.4 percentage points.”

The cost of advertising: sharp rises for Linear TV

As consumer prices rise, the media marketplace is also experiencing a time of high media cost inflation. According to the World Federation of Advertisers (WFA) it is especially true of Linear TV, with 10.2% inflation on average in 2022, and BVOD, with 5.9%.

Other media are experiencing lower levels of inflation: Digital Video inflation (excluding TV content) is forecast at 5.3%, OOH at 4.3%, Radio at 3.7%, Display at 3.0% and Print (Newspapers & Magazine) inflation averaging at 1.1%, with even deflation in some markets.

Performance marketing channels drove strongest growth

Digital channels, most commonly used for pay-for performance marketing, continues to drive global ad spend growth in 2022, up 14.2% to reach $409.9bn, a 55.5% share of total ad spend.

This growth is supported by Video (+23.4%), Paid Social (+21.9%), Search (+12.9%), and Programmatic (+19.9%). The digitalisation of traditional media will be another key driver of total ad spend growth in 2022.

Huijboom added: “Despite global economic uncertainty, brands are continuing to prioritise their spend in channels which will give them both the digital-flexibility and return they seek. It is through our clear and robust insight and understanding of the market we are able to work with clients to navigate what’s next and partner with them on their future investment.”

World Cup enters the ‘Golden Quarter’ of retail

Boosted by the FIFA World Cup– which will cross over with the traditionally busy ‘holidays’ season for the first time, puts a big retail focus on Q4 and pushes Television ad spend growth to 3.6%, reaching $192.8bn.

Within this Linear TV is growing by 2.0%, Connected TV (CTV) up by 22.3% and Broadcaster Video on Demand (BVOD) growing by 16.0% as audiences shift to digital platforms.

Out-of-Home (OOH) and cinema will both see encouraging double-digit growth in 2022 (respectively 11.5% and 19.6%).

Radio is also forecast to grow, much faster than initially considered with a new reforecast of 5.0% for the year, up from 2.0% in the January predictions – which is mainly due to faster return to office working. As with previous predictions, ad spend in newspapers and magazines will continue to decline.

Regional differences: Americas top regions, India earmarked for biggest growth

In 2022, the Americas will be the top ad spend region at US$329.6 billion and the most dynamic with spend increasing by 13.1%. India at 16.0% growth will stay ahead of the US at 12.8% and Brazil at 9.0% as the fastest growing market.

Results by industry: Technology and Retail soar as e-commerce accelerates post-pandemic

Industry wise, the greatest growth is forecast for the Technology sector (+11.3%), which has benefited from people’s greater reliance on digital devices. Retail is one of the key sectors of spend growth at a rate of 11.0% in 2022. The sector is driven by a number of factors including the significant growth of e-commerce, the entry of new players, and the introduction of emerging retail platforms.

This dentsu Global Ad Spend Forecast not only looks at the data from 58 markets, but also examines some of the key factors impacting ad spend shift, such as inflation increases, sustainability regulation, acceleration of gaming as an ad medium, doubling down on addressable media and also the importance of buying attention as core metric.

The full dentsu Global Ad Spend Forecast - July 22 can be downloaded for free here: