Global advertising spend is expected to grow 4.6% to reach US$752.8 billion in 2024, driven by media inflation, according to the latest Dentsu global report.
The report, covering 58 markets, noted media price inflation continues to have a significant influence on growth, with global advertising spend at constant prices projecting a 2024 increase of only 2.5% when compared to 2023 spending.
Digital is expected to reach $442.6 billion in 2024, representing 58.8% of global advertising spend. It will continue to be the main driver of global ad spend growth and capture the most incremental ad dollar investments, with an additional $27.1 billion spend next year.
The slowdown to single-digit growth first observed in 2023 (6.3%) is forecast to continue in 2024 (6.5%) and to become the norm over the next years: 6.3% three-year compound annual growth rate (CAGR) to 2026.
The report shows that in 2024, significant media opportunities arise for advertisers from major cyclical sporting and political events such as UEFA EURO2024 and the US presidential election, driving increased investments both at a market and international level.
Will Swayne, global practice president – media at dentsu said 2024 is ripe for positive growth in ad spend with major political and sporting events in the year ahead despite current worldwide geo-political instabilities and economic outlook.
“But overall spend is just one of the metrics we need to consider, so for the first time, we have conducted a deep dive analysis into market GDP and population as new alternative ad spend benchmarks for our clients,” he noted.
Ken Lam, iProspect Australia’s national head of investment, said the forecast for 2024 predicts moderate growth for Australia and the APAC region. This will be driven by continuing growth in travel, automotive, and food and pharmaceutical, as well as a bounce back in the retail, finance and technology sectors.
On a local scale, Lam said 2023 has been “relatively strong” with total ad spend back only 2% Jan-Oct YTD from a record year in 2022, despite a year of economic uncertainty.
He continued: “With the latest news from RBA to pause interest rates in their final meeting this year, there should be optimism for advertisers heading into 2024 and a great opportunity for brands to accelerate growth through opportunities in emerging tech like AI, advancing automation and digitalisation capabilities to maximise performance, effectiveness and outcomes.”
Advertising spend is forecast to represent, on average, 0.75% of the gross domestic product (GDP) of the countries tracked*, which is consistent with the average annual ad spend/GDP indicator observed in the last 20 years (0.70%), according to Dentsu analysis of 2024.
The report also noted that in 2024, advertisers will spend, on average, $139 per capita across the world, which is 75% more than what they spent 20 years ago at $80.
The ad spend per capita indicator also shows the growing ad pressure faced by audiences.
Swayne noted audiences are receiving an increased volume of ads, and finding new ways to drive ad effectiveness has never been more important. “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,” he added.
Advertising spend is expected to grow across all regions, with The Americas forecast to overtake APAC as the most dynamic with 5.8% growth in 2024. APAC is predicted to grow by 4.0% in 2024 (+0.5 percentage point vs. 2023), and EMEA by 2.7% growth (+0.8 percentage point vs. 2023).
The Dentsu report also forecast that the first quarter will be the slowest at 4.2%, growth is forecast to accelerate in the second quarter (4.9%) before peaking during the third (5.5%), supported by major sports events.