GroupM has unveiled its findings from the latest global media spend forecast and trends report, This Year Next Year.
The report explored the external factors spanning technology, culture, government, and the economy that will impact advertising over the coming months and years – things like AI, digital news and retail media.
Advertising remains a constant in a period of social and technological evolution.
From an overall global perspective, the media company’s global estimate for 2023 is that growth will remain unchanged since the December forecast — 5.9%. The twice a year report noted that while it is positive in nominal terms, it is negative after adjusting for inflation.
Meanwhile, for Australia, GroupM forecast that the rest of 2023 will remain flat with total media growth of 0.2%, but there are pockets of growth this year.
GroupM’s overall global forecast
In 2023, the media company’s estimate for growth remained unchanged from our December forecast. At 5.9%, global advertising in 2023 will total $874.5 billion, excluding U.S. political advertising.
The adoption of Connected TV among consumers and advertisers is growing rapidly, according to the report. Connected TV added 10.4% in ad revenue between 2023 and 2028 on a compound annual basis.
Consumer spending on subscription video on demand (SVOD) represents between just one-fifth and one-third of total video spending in major markets, leaving plenty of room for streaming providers to grow subscriptions.
The report also found that retail media is the third fastest-growing advertising channel in 2023 (behind digital OOH and CTV, although those channels are a fraction of the size). Retail media, which includes ad revenue from last-mile delivery services, will grow 9.9% to reach $125.7 billion in 2023 and is forecast to exceed TV revenue (including CTV) in 2028.
Meanwhile, AI is likely to inform or touch, in some way, at least half of all advertising revenue by the end of 2023.
Australia’s forecast in 2023
Looking toward Australia, GroupM’s report noted the nation’s forecast will remain flat total media growth of 0.2%.
Total Television revenues (including Linear, Subscription and BVOD) is expected to decline -6.1% year-on-year, as online commerce remains a crucial driver of digital growth, with a 37.5% growth forecast for 2023.
Meanwhile, total digital and out-of-home media continue to enjoy positive momentum, with forecasted growth of 3.6% and 9%, respectively.
The report also noted surprise performers, with cinema revenues presenting robust numbers with 10.1% growth – of a much smaller base. Magazines were the other surprise performer with a 10.4% growth, including digital extensions – the first growth period in 12 years.
Meanwhile, Total Audio is set to see a -3.3% fall despite podcast and streaming seeing growth of 12.8%, and Newspapers are set to decline -13.3%.
Melissa Hey, GroupM chief investment officer, said: “2023 is delivering the expected challenge of tougher economic conditions. The impact of higher interest rates, rising energy costs and the increased cost of living are contributing to a flat market forecast for the year.
“While 2023 has started slower than anticipated, there are pockets of growth, including BVOD, podcasts and streaming. Digital continues to see growth, and retail media remains a bright spot on the horizon driven by increased players, greater innovation and changing consumer behaviours.
“While the cost-of-living increases may continue to impact consumers in the second half of the year, the marketing lessons from previous downturns remain the same: the brands that maintain a consistent market presence through advertising gain an extra share of voice and consumer trust,” Hey added.