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Advertising Industry: Difference between revisions
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=== Disclaimers === | === Disclaimers === | ||
Do advertising agencies like Magna and Zenith have a positive bias? | Do advertising agencies like Magna and Zenith have a positive bias? | ||
[[File: | === Magna Forecast <ref>https://magnaglobal.com/us-ad-market-update-march-2023/</ref> === | ||
=== June 2023 === | |||
'''Advertising spending slowed down to a halt in the first quarter of 2023 (+1.5% globally, flat in most Western markets) due to economic uncertainty and the lack of cyclical drivers.''' There are, however, some drivers mitigating the impact of economic slowdown: Ecommerce and Retail Media bringing more marketing dollars into digital advertising formats, and the counter-cyclical dynamic of some large industry verticals (Retail, Auto, Travel). | |||
[[File:Screenshot 2023-07-14 112834.png|center|thumb|683x683px|https://magnaglobal.com/global-ad-market-june-2023-update/]] | |||
* Magna predicts media owners advertising revenues will reach '''$842 billion this year, +4.6% growth vs. 2022 ($805bn). Deterioration of economic conditions and marketing spending in most Western markets is mitigated by stronger-than-expected growth in some markets (China, Spain), industry verticals (Retail) and media types (Retail, Social).''' | |||
* Traditional media companies and branding formats (Television, Audio, Publishing, OOH, Cinema) are most exposed in this uncertain business climate, as some brands reduce marketing budget or prioritize performance-based digital ad formats. | |||
* '''Digital pure-play advertising sales will grow by +8.5% to reach $577 billion dollars i.e., 69% of total ad sales''', driven by organic growth factors (ecommerce, retail media, media consumption shifts, stabilization in the data landscape). | |||
* The strongest ad growth rate this year will come once again from India (+12.3% to $12.6bn); India is the 11th largest market. The Chinese ad market is set to recover faster than previously expected (+8.4%). At the other end of the spectrum, most Western European markets will stagnate this year: Germany, France, Italy all below +3% growth all-media, and negative for traditional media owners. | |||
* In 2024, economic stabilization and the return of major cyclical events (US presidential elections, Paris Olympics, Euro Football championship) will re-accelerate ad spend: +6.1% to $892 billion globally, +7.3% in the US. Traditional media owners’ ad revenues will recover by +1% while digital pure players ad sales will increase by +8%. | |||
* Social media formats will re-accelerate by +9.4% this year reach to $172 billion. The industry seems to have turned a corner in 1Q23 when Meta reported a return to YOY growth on an FX-adjusted basis after two consecutive quarters of flat or negative growth. '''Meta and other established social media vendors seem to have finally recovered from the loss of workable consumer data in the Apple ecosystem since late 2021, and they are making inroads in the monetization of the short vertical videos that have completely changed the user experience, challenging ad optimization, in less than two years.''' | |||
* '''North America and European markets will underperform this year''' (ad market growth of +2.5% and +4.2% resp.), due to weaker economic activity (+1.6% and +0.8% real GDP growth, resp), mature media/marketing landscapes, and a lack of major cyclical driver compared to 2022. APAC (+7.1%) and Latin America (+8.7%) will grow significantly faster. | |||
=== | === December 2022 === | ||
In its new 2023 scenario, MAGNA expects little or no growth in the first half (+2% in 1Q23, +4% in 2Q23) against tough quarterly comps, followed by a recovery in the second half (+6% to +7%), as the economy solidifies, and advertising comps become much easier. Overall, full-year advertising revenues will grow by +3.4% this year to reach $326 billion (incl. CE). | [[File:Advertising2.PNG|thumb|https://magnaglobal.com/us-ad-market-update-march-2023/]]In its new 2023 scenario, MAGNA expects little or no growth in the first half (+2% in 1Q23, +4% in 2Q23) against tough quarterly comps, followed by a recovery in the second half (+6% to +7%), as the economy solidifies, and advertising comps become much easier. Overall, full-year advertising revenues will grow by +3.4% this year to reach $326 billion (incl. CE). | ||
* Search and e-commerce advertising formats (Google, Amazon, retail media networks) will continue to be driven by the expansion of e-commerce to CPG and grow by +10% (slowing down from +14% in 2022) to remain the largest advertising format ($125bn in 2023) | * Search and e-commerce advertising formats (Google, Amazon, retail media networks) will continue to be driven by the expansion of e-commerce to CPG and grow by +10% (slowing down from +14% in 2022) to remain the largest advertising format ($125bn in 2023) | ||