Amidst economic uncertainty and challenging geopolitical conditions, IPG Mediabrands’ Magna is pulling back on its growth forecasts for global ad markets for 2022 and into 2023.
Global ad revenue in 2022 grew by 6.6% to $795 billion, Magna reported in the December update to its advertising forecast, thanks to cyclical spending from U.S. and Brazilian elections, the Winter Olympics and the FIFA World Cup. The growth fell short of the 9.2% increase, to $816 billion, it predicted in its summer global ad forecast.
Magna now expects 2023 global ad revenue to increase by 4.8%, to $833 billion, down from the 6.3% growth target it gave in June.
A large source of digital weakness is social media. Global social media ad sales grew by just 4.4% to $149 billion in 2022, a far cry from the growth rates of 20% to 35% observed in the previous three years, according to Magna. A more competitive environment and other data hurdles such as adapting to monetizing vertical video formats on TikTok, YouTube and Instagram have slowed the growth rate of new money injected into the space in 2022.