The International Monetary Fund expects global inflation to slow down to 7% during 2023. Global advertising, however, (excluding US political advertising) is expected to reach USD 874.5 Bn during 2023. India’s advertising revenue growth would be among the highest in the world. These are some of the key findings from This Year Next Year Global Mid-year forecast for 2023 released by GroupM recently.
Global advertising revenue (excl. US political advertising) is expected to grow in the second half of 2023 by 5.9% and by 6% in 2024.
India’s advertising revenues from traditional and non-traditional revenues collectively, would grow 12% during 2023, the highest among the top 10 markets in the world, according to the reort. US, which is expected to grow by 5.1%, would reach USD 322.5 Bn while China would grow by 7.9% in the next half year of 2023.
Germany’s ad-revenues would grow by 6% while that of France will grow by 4.2%. Brazil’s advertising revenues for 2023 would grow by 6.6% while Canada would grow by 5%. The United Kingdom and Japan, each would grow its ad-revenues for the year by 4.8% while Australia would see the lowest growth of a mere 0.2% for the rest of the year.
Among the various channels of advertising, the traditional Print advertising medium is expected to see a sharp fall by 4.8% while television advertising would come down by 1.2% for 2023 over last year.
Digital areas of spending by brands and consumer facing companies is expected to have the highest growth of 12.7% for 2023. Digital pure play ad-revenue will account for 68.8% for 2023 of the revenue pie and is expected to reach 74.4% of the total by the year 2028. The single-digit growth is due to a large base and a maturing medium that is digital, quote the findings of the report.
Retail media, which is around 14.4% of the total revenues, will grow 9.9% during the rest of 2023. Retail media, according to GroupM, includes revenue from last mile delivery providers.
Out of Home advertising (OOH) will grow the highest during 2023 by 12.7% on the back of a full recovery post-pandemic. Hybrid working, which is a combination of WFH and from office combined, is becoming mainstay worldwide, getting potential consumers to step out of home. The growth % is in double-digit, also because of a 2-year rout on the back of the Covid-19 led lockdowns and business disruptions.
Digital OOH is expected to grow 12% on the back of a massive recovery in the Chinese market, where it will grow by 39.7%. China has been among the worst affected between 2020-2022, where the Covid-19 virus is said to have originated from.
Top 25 global ad-sellers accounted for 75.3% of the advertising revenue during 2023, according to the Group M report. It was 74% during 2021.
“We are at an inflection point where the secular drivers of advertising growth above and beyond GDP growth are maturing, the pandemic upheaval is receding and the dynamic rise of digital advertising has slowed. This is the basis of our underlying forecast of mid-single-digit advertising growth over the next five years. However, the pervasive impact of AI on the world of advertising could change that,” Group M said in its report.
“Advertisers in this environment will be well-served by having proactive guidelines and the right partners to navigate these waters so that choices in budget allocation and the use of AI are made intentionally with the long-term health of the business in mind”, added the report in its final remarks.
The report should bring joy as well as alertness to the ecosystem partners, given the changing pattern of the medium where consumers are watching and consuming content. From being an underdog before the pandemic, digital advertising is becoming more powerful by the day in emerging markets like India, Brazil and China.
According to various reports, consumers aged between 25-45 years in India spend over 200 minutes a day on digital devices, consuming entertainment and news, shopping online and engaging in social media platforms. While television audience remains strong in India, the preference for multi- device consumption is growing by the day due to personalised content as well as a massive proliferation of devices coupled with an extensive 4G, 5G mobile networks and cheaper internet.
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