Global advertising revenue is projected to grow by 5.9% in 2023 which will amount to a total of $874.5 billion.
WPP’s media investment group, Group M revealed this in its new report “This Year Next Year Global Mid-Year Forecast”
It disclosed that digital out of home, connected TV and retail media were the fastest-growing channels, with retail media expected to exceed TV, including CTV, revenue in 2028.
According to PR Week, the report said digital pure-play ad revenue, which includes search, social media and retail media, whose definition has been updated to include last-mile delivery, would account for 68.8%, or $598.5 billion, of total revenue.
“The fact that our forecast remained remarkably consistent from December 2022 to June 2023, despite macroeconomic impacts from inflation and interest rates, is in part a testament to the increasing maturity of the digital channel and its largest representatives,” said the report.
However, the report added while 5.9% was positive in nominal terms, the forecast was negative after adjusting for inflation.
Group M’s forecast is still brighter than Dentsu’s, which predicts global ad spend growth will slow to 3.3% in 2023.
U.K. growth has been slightly downgraded by Group M to 4.8%, with revenues of $49.4 billion – down on 5% in December. Growth is expected to be 5.3% in 2024.
U.S. growth is expected to be 5.1% in 2023, with revenues of $325.3 billion, and 5% in 2024.
The report said there had been a “marked decelaration” in digital ad revenue expansion from the 32% recorded in 2021, down to 9.2% in 2022 and 8.4% expected in 2023. However, this was due to growth in the channel reaching a level of maturity, rather than a “recessionary environment.”
The report said in the largest linear TV markets, including the U.K. and U.S., the “declines are clear”, with annual growth rates in those markets from 2023-28 expected to be 2.8% and 4.1% respectively.
Global TV revenue is forecast to be $133.6 billion in 2023, down 1.2% on 2022.
Audio globally is expected to decline 0.3% in 2023 and “remain roughly flat” over the next five years.
Print is forecast to drop 4.8% in 2023, following a 2.9% fall in 2022.
OOH is expected to grow by 12.7% in 2023 and has “succeeded in surpassing 2019 revenue levels one year earlier than we have predicted in our December 2022 forecast.”
Meanwhile, the report said artificial intelligence was “likely to inform, or touch in some way, at least half of all advertising revenue by the end of 2023.”
“It is incumbent on all of us to use it conscientiously and with appropriate safety measures in place,” said Group M.
The report said in light of data privacy concerns and cookies’ fall from favor “we expect logged-in environments to continue to appeal to advertisers looking to maximize addressability and performance.”
The report went on: “A topic of discussion in governments around the world is the concern around misinformation, especially disinformation perpetrated by state actors.
“We expect platforms including TikTok, Meta, Twitter and YouTube to face pressure from governments regarding their ability to identify, prevent, take down and report on both misinformation and disinformation,” the report said. “This could impact development resources allocated to advertising product upgrades or innovation over the near term.”