Dentsu has trimmed its 2023 growth forecast for global advertising spend.

The holding company is now projecting 3.3% growth in ad spending to $727.9 billion in 2023. The projection marks a decrease from its previous 3.5% growth prediction, which was adjusted for this report to account for hyperinflation in some markets from Dentsu’s December 2022 report, which predicted 3.8% growth. Dentsu’s global ad spend forecast, which examines data across 50 markets, is issued twice a year.

Notably, the report said that growth will be driven by media price inflation instead of increased advertising volume. If ad spending were at constant prices, Dentsu would have expected a decline of 0.6% compared to the same period in 2022. 

For 2024, Dentsu expects ad spending growth will pick back up, increasing by 4.7% to reach $762.5 billion, in part because of cyclical events such as the UEFA Euro Championship and the U.S. presidential election.

Predictions in the Dentsu report are on par with other agencies’ expectations. In March, IPG Mediabrands’ Magna predicted 2023 global ad sales would rise 3.4%, down from its December forecast, which called for 4.8% growth in 2023.  

In 2023, digital ad spending is expected to moderate to 7.8% growth to $424.2 billion, an uncharacteristically low number only previously seen during the height of the COVID-19 pandemic in 2020 and after the 2008 financial crisis, according to Dentsu’s latest report. The digital market is reaching a state of maturity and is expected to settle into consistent single-digit growth for the next three years, accounting for about $3 of every $5 spent—or nearly 60% of market share—of advertising globally, according to Dentsu. 

Innovations in technology, updated platforms, new channels and changes in planning behaviors will keep digital ad spend growth consistent, according to Peter Huijboom, global CEO of media international markets at Dentsu.

“For years now we’ve seen the industry pivot towards digital, more than doubling investment in the last five years, thanks in part to the almost unlimited potential to reach, engage and sell to individual consumers,” Huijboom said in a statement. “It has been one of the big drivers for growth, but with finite marketing budgets available to brands—it’s clear we are now starting to reach a point of digital maturation within the campaign mix alongside more traditional channels.”

Emerging digital categories are still expected to see high growth in 2023, such as retail media growing 18% and connected TV growing 15.2%, Dentsu projected. The preference for programmatic buying is also on the rise, with the amount of advertising spend transacted programmatically predicted to increase by 14.4%, to reach 71.4% share of digital spend in 2023.

Other media channels continuing to see year-over-year increases include out of home, which is expected to grow 3.8%; cinema, which is expected to grow 2.1%; and audio, which is anticipated to grow 0.8%.

TV ad spend is predicted to fall by 3.1% to $170.2 billion in 2023, though Dentsu predicts this decline to be a temporary drop, with growth returning in 2024 and beyond.

Print ad spending is expected to continue its downward spiral, declining 4.8%, according to the report. It’s even possible that out-of-home media could surpass print spend to become the third most popular ad format, according to Huijboom.

“Of course, we’re excited about the impact generative AI could have on our industry with the arrival of new in-channel opportunities for brands to embrace, so we’ll need to see if [out-of-home surpassing print ads] remains the case,” he said. 

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CLARIFICATION: A previous version of this story did not include details on Dentsu adjusting its December forecast for hyperinflation.