Global adspend to rise by $23bn in 2023, but signs of slowing growth in digital pointing to maturity

New global forecasts for the state of the ad market reveal growth is still on the horizon, but at a slower pace than we saw last year.

The growth rate of 3.3% predicted this year by the latest dentsu Global Ad Spend Forecasts report is worth $23bn to the market, and means spend is set to hit close to $728bn in 2023. The results of dentsu’s analysis mean that forecasts have been slightly downgraded from the previous release, when spend was looking to hit almost $741bn.

But it’s media price inflation, rather than increased spend which is driving the growth, with an analysis of the top 12 spending markets (US, China, Japan, UK, Germany, France, Australia, Brazil, India, Canada, Italy and Spain) revealing that adspend at constant prices is likely to dip slightly by 0.6% year-on-year.

2024 looks more buoyant, with growth forecast to be 4.7% next year to mean a total spend in the global industry of $762.5bn, driven by major sports and political events including the US Presidential election, the Paris Olympics and Paralympics and football’s UEFA Euro Championship.

Digital ad market to hit maturity?

Digital adspend is set to grow by an encouraging 7.8% – or $30.6bn – this year, more than double the rate of the total market. But pure play digital (not including a digital extension of ‘traditional’ channels) will see the first of three consecutive years of single-digit growth, reported to have only happened twice in the past 20 years – during 2009’s financial crisis and 2020’s COVID-19 pandemic height.

Digital will still account for the lion’s share of spend over the next three years according to the forecasts – to hit $424.3bn this year (58%), before growing to be worth around 60% of total spend by 2025. The channel will be worth $3 in every $5 of global adspend.

Despite the forecasts pointing to a maturity in digital adspend, ‘emerging’ categories will enjoy a faster rate of growth, with the forecasts pointing to a rise of 18% this year for retail media and 15.2% for connected TV.

dentsu predicts a continued strength in investment in search - with an 8.9% growth this year resulting from an expansion from traditional search engines into social media platforms and innovation in AI powering the channel. And programmatic buying will grow by 14.4%, with adspend transacted programmatically to reach 71.4% of digital adspend this year.

Peter Huijboom, Global CEO, Media international markets, dentsu, said: “For years now we’ve seen the industry pivot towards digital. It has been one of the big drivers for growth, but with finite marketing budgets available to brands – it’s clear we are now starting to reach a point of digital maturation within the campaign mix alongside more traditional channels.

“There are still some markets, for example India where the digital potential is in its adolescence, who continue to see rapid growth in digital spending – contributing to the global uplift.

“But it is also through innovations in tech, updated platforms, new channels and changes in planning behaviours, we’ll retain this consistent growth within digital investment worldwide.”

APAC the fastest growing region in 2023 adspend

The forecasts covering 58 markets across the world reveal that the Asia Pacific (APAC) region leads the way for growth at 4.6%,with EMEA and the Americas falling behind, with forecast growth of 1.9% and 2.9% this year respectively.

Growth is set to accelerate in the Americas next year, at 5.5%, overtaking the 5.1% seen for APAC, but EMEA will continue to grow at a slower pace (2.6%), albeit at a faster rate than this year.

The Americas will still account for the majority of spend across the globe – at some 46% of the total $762.5bn predicted to be spent in the market next year.

Audio growth more muted

Outside of pure play digital, TV adspend is set to fall this year at 3.1%, though next year’s events are paving the way for a bounceback to growth.

Audio will enjoy a muted growth this year, at 0.8%, though this is set to accelerate to 3.8% next year, while out-of-home spend will grow by 3.8% in 2023, and 3.4% in 2024.