In 2023, global advertising is expected to grow 5.9%, with gains in connected TV, retail media and in markets like India, which is a downgrade from the 6.4% estimate in June.
IPG Mediabrands' Magna also reduced its 2023 forecast slightly, predicting 4.8% growth, to $833 billion. It had predicted a 6.3% growth in June, which was attributed to the deteriorating macroeconomic outlook. For 2022, Magna expects ad revenue to grow by almost 6.6% to $795 billion thanks to cyclical spending from U.S. and Brazilian elections, the Winter Olympics and the FIFA World Cup, down from its summer forecast for 2022 growth of 9.2%.
The biggest factor in GroupM's lowered outlook is China, which is still suffering economically from the fallout of COVID-19 lockdowns and protests. It now expects China to decline by 0.6%, after predicting a 3.3% increase. U.S. growth for 2023 is now pegged at 7.1%, down from 10.1% in June, excluding political advertising. Combined, the two markets are expected to make up 55.5% of all advertising revenue in 2022.
But the lower 2022 and 2023 global ad revenue growth forecasts aren’t necessarily portents of doom. In a GroupM press briefing, Kate Scott-Dawkins, global director, business intelligence, attributed the shifts to the continued shakeout from the pandemic and the ongoing recovery.
“I think that's a real theme as we go into the end of the year is that normalization,” she said, adding that growth in the second and third quarters of 2021 was quite strong. “It's a really tough comparable for the companies we track in terms of their advertising revenue ... so I think once we lap that and get into next year, we're looking to see more normalized growth rates as well.”