Staff Reporters
Jun 19, 2023

APAC leads global ad growth in 2023 as traditional media struggles: MAGNA

After experiencing a slowdown in 2020 due to the pandemic and bouncing back with double-digit growth in 2021, ad spending growth rates in most APAC markets are now returning to the levels and trends pre-Covid.

APAC leads global ad growth in 2023 as traditional media struggles: MAGNA

The Asia-Pacific region has emerged as an advertising powerhouse, surpassing the global average growth rate and fueling the expansion of the ad economy, according to Magna's 2023 ‘Global Ad Forecast’. 

According to the report, global advertising revenues for media owners are expected to reach $842 billion this year, marking a growth of 4.6% compared to 2022.  

Despite a slight downward adjustment from the previous forecast, the report notes that the deterioration of economic conditions in Western markets is balanced by stronger-than-expected growth in specific regions, industry verticals, and media types. 

In contrast, the APAC advertising economy is projected to grow by an impressive 7%, outpacing the global average of 5%. This is primarily driven by India and Pakistan, with the former experiencing a remarkable 12% increase in ad spend.  

Digital continues to rule

Digital advertising in APAC also continues to power market growth, with social and video formats experiencing significant increases of 12% and 11%, respectively.  

Although already representing a substantial 47% of total digital budgets, search is projected to grow by 9%, and in tandem with social media formats remain the dominant ad formats, with search/commerce nearing the $300 billion milestone and social media growing by 9.4%. 

Mobile advertising campaigns drive much digital growth constituting nearly 84% of unlimited digital budgets, and are expected to increase by 2024, accounting for 86% of unlimited digital budgets. 

“Digital advertising in APAC has slowed significantly in 2022 and 2023 vs the pre-2022 trend, but remains resilient and continues to lead all formats for advertising revenue growth,” said Leigh Terry, chief executive officer of Mediabrands APAC. 

“Many of the headwinds that slowed Chinese digital advertising revenue growth in 2022 (zero-COVID policy, continued government regulation headwinds, etc.) are lessening in 2023 and will allow big digital publishers to continue to grow.” 

Digital pure-play advertising sales are also set to grow by 8.5% globally, reaching $577 billion and accounting for 69% of total ad sales. This growth is fueled by factors such as e-commerce, retail media, media consumption patterns shifts, and data landscape stabilisation.  

Traditional media remains at a decline

Globally, traditional media companies and branding formats face significant challenges, with owners of such platforms facing a decline of 3% in ad revenues, amounting to $264 billion. Television advertising in particular, is challenged by the erosion of linear viewing, a slowdown in pricing conditions, and the absence of major cyclical events. TV ad revenues are expected to shrink by 5%, while publishing ad sales will drop by 4%.  

Audio media ad revenues will remain stable, but media categories such as cinema and print continue to decline. Out-of-home advertising, however, shows promise with a projected 5% growth, catching up to pre-COVID market size. On the other hand, digital non-conventional ad sales, such as addressable linear campaigns and AVOD pre-rolls on connected TVs, continue to grow. 

2024 outlook

Looking ahead to 2024, predicted economic stabilisation and the return of major cyclical events are expected to accelerate ad spend by 6.1% globally. While North America and European markets are anticipated to benefit from this growth, APAC markets, especially India and China, will continue to expand. 

Source:
Campaign Asia

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