The midyear follow-up to the January 2022 edition of the dentsu Global Ad Spend Forecasts points to a continued recovery despite another year of economic uncertainty.
Midyear dentsu Ad Spend Report 2022
As part of the integrated network of global dentsu agencies, dentsu X has access to vast resources, specialists, partnerships data, and insights which we’re able to leverage for the benefit of our clients and colleagues in order to help understand what’s next. One of these valuable insight tools is the bi-annual dentsu Global Ad Spend Forecasts report which looks at advertising spending from almost 60 markets around the world to project brand behaviours and media industry trends for the coming years.
The new dentsu Global Ad Spend Forecasts anticipates a continued recovery despite another year of economic uncertainty, with global 2022 ad spend of US$738.5b. We have adjusted our 2022 growth forecast by -0.4 percentage points from 9.1% to 8.7% off a stronger base in 2021 and with the expectation of rising inflation impacting consumer demand.
Share of global ad spend
Digital continues to drive global ad spend growth in 2022 (+14.2%) to reach US$409.9b, a 55.5% share of total ad spend. This growth is supported by Video (+23.4%), Paid Social (+21.9%), Search (+12.9%), and Programmatic (+19.9%). Boosted by the FIFA World Cup in Q4, Television ad spend is expected to grow by 3.6% to reach US$192.8b, with Linear TV growing by 2.0%, Connected TV (CTV) by 22.3% and Broadcaster Video on Demand (BVOD) by 16.0% as audiences shift to digital platforms. We maintain our double-digit growth forecast for Out-of-Home (OOH) and Cinema, with 11.5% and 19.6% growth respectively. Audio will grow more slowly at +5.0%, with Digital Radio accounting for 23.5% of Audio media investments. Print forecast is negative at –3.6%, in line with structural trends observed for several years.
The media marketplace is experiencing a time of high media cost inflation. According to the World Federation of Advertisers, it is especially true of Linear TV, with 10.2% inflation on average in 2022, and BVOD, with 5.9%. Other media are experiencing lower levels of inflation: Digital Video inflation (excluding TV content) is forecast at 5.3%, Out-of-Home at 4.3%, Radio at 3.7%, Display at 3.0% and Print (Newspapers & Magazines) inflation averaging at 1.1%, with even deflation in some markets.
But why do we seem to be entering a perfect storm for inflation this year?
On the demand side, as economies across the world are recovering from the pandemic and easing restrictions, consumer spending is growing. Brands are eager to capture this consumer demand by advertising, which increases their own demand for media inventory.
Certain categories in particular are increasing spend including Travel, Entertainment, and Quick Service Restaurants, as more consumers can go out and plan holidays more freely. New sectors also emerged during the pandemic, like Rapid Grocery Delivery, with many brands now advertising for the first time to build market share.
Additionally, as mentioned in our January edition of the dentsu Global Ad Spend Forecasts, 2022 is an election year in many markets, and political spending could increase media inventory pressure even more locally.
On the supply side, inventory is falling for some channels like TV, particularly for younger audiences who now enjoy more active social lives than under lockdown. This is combined with an audience shift to advertising-free platforms that double down on exclusive programming, illustrated by Apple TV+ securing rights for some Major League Baseball games.
However, new inventory could soon open from other Subscription Video on Demand (SVOD) platforms, with Disney+ announcing an ad-supported subscription plan by the end of 2022 and Netflix also exploring ad-supported offers.
As advertisers look to optimise their media investment strategies, we invite them to reflect specifically on two spaces to watch covered in the report:
The largest retailers are launching or revamping their media capabilities
After Search Marketing and Social Advertising, Retail Media is poised to become the third massive wave of digital advertising.
Following Amazon’s lead, all the largest retailers are currently launching or revamping their Retail Media capabilities, from legacy media networks like Criteo to new players in the space such as Deliveroo and Marriott to e-commerce tech platforms like Shopify and Salesforce – with no sign of slowing down in 2022.
We see high levels of convergence within this space. More brand and social content is moving into the retail environment. For example, live streamed shopping combines engaging content with e-commerce. Retail data is coming to the big screen, meaning we will see increasing shoppable opportunities on TV. In-store journeys are also ready to be transformed with data driven experiences, including greater use of digital screens and mixed reality.
The 2022 FIFA World Cup, which will spur digital participation by fans across the world
As one of the most anticipated global sports events in 2022, the next FIFA World Cup hosted in Qatar will present a few unique factors.
The biggest difference is timing: media spend around the tournament will compete with other festive advertising around Black Friday and the lead up to Christmas, which means the usual uplift in media budgets around the tournament may be slightly diluted this year. Although the Arabia Standard Time will favour audiences in traditional football heartlands, this does not mean there will not be opportunities for brands in APAC.
For the previous tournament taking place in Europe, EURO 2020, cumulative audience in China reached 352 million. Another crucial change is the rising importance of digital media in the sport. The number of digital interactions and views for the EURO 2020 content reached 7.5b.
The top post from the tournament official TikTok account alone generated more than 73m views - this for a platform which had barely launched at the time of the previous World Cup! Advertisers willing to navigate the potentially risky path of user-generated content to encourage social conversations may see a significant return on investment.
Of course, the global response to the evolution of the COVID-19 pandemic will play a decisive role in how forecasts ultimately play out. Escalating media price inflation, geopolitical tension, and upcoming key elections will also influence growth prospects, and we recommend the industry keep a close eye on key economic indicators, which is what we will be doing in partnership with our clients at dentsu X to ensure we’re ahead of any impacts to campaigns and business growth.
For more information, please download the full dentsu Ad Spend Report