Here’s what will happen to the advertising market in 2024. Report Wsj
Global advertising growth is expected to slow in 2024, excluding campaign spending in the United States ahead of the presidential election. The Wall Street Journal's in-depth analysis
Global ad spending growth is set to slow in 2024 to 5.3%, excluding US political advertising, according to a new forecast from media investment group GroupM.
This figure would mark a deceleration compared to the 5.8% increase that GroupM expects for this year, according to forecasts – writes the WSJ .
WHAT THE GROUPM REPORT REVEALED
GroupM, part of advertising giant WPP, said growth could be negatively affected next year by potential factors such as the effect of high interest rates on consumer and business spending. Additionally, he said a number of China-based companies, which have spent heavily to acquire international consumers, could become less influential on advertising growth in 2024, when U.S. household savings decline and Europe could experience an economic contraction.
FORECASTS ON GLOBAL ADVERTISING SPENDING IN 2024
Global ad spending, excluding political activity, is forecast to reach $889 billion this year and $936 billion in 2024. Despite concerns about economic uncertainty in 2023, GroupM's new forecast for this The year is only 0.1 percentage points lower than the previous forecast for 2023 published in December 2022.
“We've been through some volatility over the last five years or so,” said Kate Scott-Dawkins, president of GroupM's business intelligence division and author of the report. “We expected a deceleration in the future. I believe that innovation through artificial intelligence and the digitalization of these channels has now led us to expect more stable growth, rather than a sharp deceleration, over the next five years.”
AD GROWTH EXPECTED TO SLOW IN 2024
Another widely followed forecast also suggests a slowdown in advertising growth is approaching. Excluding cyclical events such as political elections and sports, global ad spending in 2024 is expected to grow 5.8%, down from the 6.5% forecast for 2023, according to Magna, a media investment firm which is part of Interpublic Group's Mediabrands and conducts industry research.
However, including cyclical events, Magna expects ad spending growth to rise to 7.2% next year, from 5.5% in 2023, driven by economic stabilization, declining inflation, digital innovation and upon the return of the main cyclical events.
ALIBABA, AMAZON, BYTEDANCE, META AND GOOGLE THE MAIN ADVERTISING SELLERS
According to GroupM forecasts, the majority of advertising growth is in the hands of the major digital operators. According to GroupM, the top five global advertising vendors – Alibaba, Amazon.com, Bytedance, Meta Platforms and Alphabet's Google – grew their advertising revenues by 25.4% on a compound annual basis from 2016 to 2022, beating the pace of 9.3% of the total advertising market. This growth is due to advertisers seeking out these players' AI tools, their ability to target messages to specific users, and their self-service ad buying platforms.
THE NEXT PUSH OF DIGITAL ADVERTISING
According to GroupM, by 2028, digital advertising spending will be higher than that of the entire advertising industry in 2022.
“We appear to have reached a significant inflection point in the realization that traditional TV is in sharp decline, that advertising growth is dominated by a handful of large media and commerce companies, and that the economics of this sector are is based on this new world order, in which large advertisers and agencies represent a minority of revenue for some of their largest partners,” the report reads.
(Excerpt from the foreign press review by Epr Comunicazione)
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/ecco-che-cosa-succedera-al-mercato-della-pubblicita-2024/ on Mon, 01 Jan 2024 06:30:38 +0000.