Forecasts For Global Ad Spend Decline By $90 Bn: Report
The pattern of worldwide advertising investment may change in the upcoming year, predicts WARC. Marketers are rethinking their strategy in the face of economic crises, geopolitical complexity, spiralling inflation, supply chain disruptions, and structural technological shifts.
Advertising spending is increasing, albeit more slowly. The most recent estimate from WARC is USD 880.9bn, which eliminates USD 90 billion of potential growth for 2022 and 2023, suggesting that owners of digital media will likely put up more effort to increase ad revenue and will progressively engage in competition with one another.
The report mentioned that big Tech firms are expanding to attract advertising income. Snap is making significant investments in augmented reality, while Meta is pushing for interaction with the metaverse.However, pureplay online ad growth is predicted by WARC to be only 5.5 per cent this year, down from 42 per cent in 2021.
According to Group M, advertisers are favouring retail media more and more, defying the slump. Currently the fourth-largest medium in terms of advertising spending, with worldwide investment expected to reach USD 121.9 billion in 2023 from USD 110.7 billion in 2022. It is expected to surpass linear TV in value to marketers by 2025.
Highlighting the digital advertising spent, the report said that the investment in digital advertising is now at the start of a new phase of slower growth. WARC reduced its prediction for global advertising spending to USD 880.9 billion, eliminating USD 90 billion in growth potential for 2022 and 2023.
Adding on, it mentioned that marketers are reallocating their advertising expenditures, cutting back on spending on conventional media, and boosting spending on online video, social media, and gaming.
It's getting more challenging to use media effectively. While digital consumption is becoming more dispersed across platforms and technologies, including new social apps and proto-metaverse game settings, linear TV reach is still declining, the report said. It continued by saying that there has never been a more pressing need for flexible and creative media planning.
The report concluded by mentioning that the media sector is coming under more and more pressure to adapt, whether it's due to concerns about the effects of advertising on climate change, the importance of media investments in promoting diversity, equity, and inclusion, or the requirement to deal with a skills shortage.
