Dentsu predicts 4.6% global ad spending growth in 2024

Dentsu is expecting global advertising spending to undergo mid-single-digit growth in 2024, bolstered by digital advertising, retail media and connected TV. The holding company is projecting 4.6% spending growth in 2024 to $752.8 billion, roughly the same as the 4.7% growth it forecast in its May report. Super Bowl commercials Tracking the latest brand and agency plans Enter here This is a conservative prediction compared to Dentsu’s contemporaries. WPP’s GroupM reported earlier this week that it anticipates 5.3% global growth in ad revenue next year as the market adjusts to inflation and global economic conditions, including the ongoing Israel-Hamas and Russia-Ukraine wars. IPG Mediabrands’ Magna predicted 7.2% ad revenue growth in 2024. Read more: Industry forecasters’ ad spending optimism varies Despite major cyclical events including the UEFA European soccer championship, the Paris Olympics and the U.S. political election, Dentsu’s modest growth forecast accounts for media price inflation. At constant prices, global ad spend is projecting only a 2.5% increase in 2024, when compared to 2023 spending, according to Dentsu. For the first time, Dentsu’s report goes beyond examining financial data to look at ad spending in relation to wider macroeconomic factors such as market demographics and the gross domestic product. As a result, Dentsu found that next year, advertising spending will represent 0.75% of the GDP of the top 12 spending markets globally. This is consistent with the ratio of ad spend to GDP seen in the last 20 years, with markets including Japan, the U.K. and the U.S. spending more relative to their GDPs. The research shows that advertisers are spending more to reach audiences and that audiences are experiencing more ad pressure as a result, according to Will Swayne, global practice president for media at Dentsu. “Audiences are receiving an increasing volume of ads, so finding new ways to drive ad effectiveness has never been more important,” Swayne said. “We are seeing an increased focus on planning and buying for attention, over pure reach, as more brands seek to maximize their return on investment and capitalize on the attention economy tools available to them.” Digital and CTV reigns Connected TV is expected to see the largest growth in 2024, Dentsu found, doubling year over year to grow 30.8%, as video platforms launch or update their ad offerings. While digital ad spend is leveling out following the boom of the late 2010s, it will continue to be a main driver of global ad spending growth in the coming years, the report found. Dentsu anticipates the digital sector will grow 6.5% in 2024 ad revenue to reach $442.6 billion, composing 58.8% of global advertising spend. The 2024 growth prediction is on par with the 6.3% growth the agency holding company observed in 2023, and mid-single-digit growth is expected to continue through 2026, according to Dentsu. Check out the latest Ad Age events and award programs Retail media is still growing rapidly, with Dentsu predicting the channel to undergo a 17.2% three-year compound annual growth rate. Programmatic channels, which already account for more than 70% of digital ad spend, are also expected to see double-digit growth rates. Dentsu forecasts a 10.2% three-year CAGR. Unlike GroupM and Magna, Dentsu is more optimistic about TV ad spend. After two straight years of decline, 2024 is expected to see a modest 2.9% growth to capture 23.0% of ad spend. Also read: Why Fox and Comcast are still optimistic about linear TV Regionally, the Americas are expected to overtake the Asia-Pacific region with the most dynamic ad growth in 2024. Dentsu predicts the Americas will see 5.8% ad revenue growth next year compared to only 2.5% in 2023, and the region will accelerate the fastest until at least 2025. Asia-Pacific is predicted to grow by 4% in 2024, compared to 3.5% in 2023, and Europe the Middle East and Africa by 2.7% growth, compared to 1.9% in 2023.

Dentsu predicts 4.6% global ad spending growth in 2024

Featured Stories