Global advertising spend has been forecast to grow by nearly 5% more than the worldwide economy as measured by GDP, Dentsu’s global ad forecast has found.
The industry is predicted to grow by 9.2% to reach $745bn (£552bn) this year, which is $117.2bn more than the 2019 pre-pandemic levels. EMEA adspend is predicted to rise by 5.9% to $166.9bn.
The recovery growth rate is nearly three times faster than that of the previous major global ad decline, which came in the wake of the 2008 financial crisis. In 2022, the global ad market will exceed the 2019 pre-pandemic level of spend by 18.7%, whereas in 2011 the global ad market continued to be 1.0% lower than in 2008.
This is mainly being driven by a rise in digital adspend, which for Dentsu includes connected TV.
Following a 29.1% increase in 2021, the global advertising group predicts digital investment will grow by 14.8% in 2022, fuelled by video, connected TV, programmatic and ecommerce.
This will result in the digital share of adspend rising to 55.5% ($408bn) of total spend, becoming twice as big as linear TV's share (26.9% to $198bn), which is forecast to grow by only 3.8% due to inflation and inventory supply issues. Dentsu includes revenue generated by the digital transmission on TV (such as connected TV and VOD) in its digital adspend line.
Out of home (OOH) and cinema will both record encouraging double-digit growth in 2022 (12.8% and 23.4% respectively), with OOH even exceeding 2019 pre-pandemic spend levels. Radio, too, is forecast to grow, yet at a slower pace (2.0%). As with previous predictions, adspend in newspapers and magazines will continue to decline.
Peter Huijboom, Dentsu International's global chief executive of media and global clients, said: “The bounceback from the early pandemic impact continues to be strong, especially in digital. As we spend more time consuming digital media, brands have the opportunity to tap into the increased flexibility in which consumers engage through multiple touchpoints. Businesses who truly understand these developed human behaviours have the best opportunity to build lasting relationships with them.
“It also comes as no surprise [that there is] the increased popularity in gaming. Dentsu launched its global gaming proposition in 2021. Along with the burgeoning metaverse, there has never been a more exciting time for brands to experiment, innovate and engage with their customers – as all forms of media are increasingly more central to daily life and routine.”
The top five markets in 2022 will continue to be the US, China, Japan, UK and Germany, while the fastest growing markets will be India, US, Russia and Canada.
By region, EMEA and APAC are both predicted to grow adspend by 5.9%, while the Americas is expected to grow by more than double that (13.7%).
There are several major global events that will buoy global adspend. In the first quarter, growth is predicted at 8.9% on a like-for-like basis with a lift from the Beijing Winter Olympics and Paralympics in February. Questions remain about whether this impact will be more muted than other Olympics, as global sponsors appear to be holding back due to geopolitical tensions between parts of the West and China.
Dentsu predicts the second and third quarters will grow by 10.3% and 10.7% respectively, enhanced by mid-term election adspend in the US. This will continue into the Q4 (with growth of 9.2%), where adspend will receive another shot in the arm from the Fifa World Cup in Qatar.