Latest 2023 dentsu ad spend re-forecast shows: Digital reaches maturity in the marketing mix [REPORT]

Advertising investment is forecast to grow by 3.3% globally in 2023, according to the latest dentsu Global Ad Spend Forecasts report. Overall, an anticipated US$727.9 billion will be spent worldwide by the end of the year, according to this mid-year ‘reforecast’ of the twice-yearly report.

The adjusted dentsu Global Ad Spend Forecasts for 2023 points to continued growth, albeit adjusted marginally downwards from the 3.5% predicted in the December 2022 report, in the most part due to macroeconomic factors. Exploring behind the headlines, the report also shows growth driven by media price inflation rather than increased advertising volume, where advertising spend at constant prices is expected to decline slightly, with –0.6% reduction year on year*.

The global outlook however, as forecasted by dentsu specialists in almost 60 markets, is more positive, with spend set to accelerate faster in 2024, increasing by 4.7% to reach US$762.5 billion. This boosted ad spend is being driven by major sporting and societal focal events such as UEFA Euro Championship and the US presidential election.

2023 will see digital continue to grow, but in an uncharacteristic single digit increase (7.8%), which has only happened twice before in the last 20 years: in 2009 (financial crisis consequences) and in 2020 (COVID-19 pandemic). Looking ahead, single-digit growth in digital is expected to become the norm, with a fairly consistent dollar increase year on year for 2024 and 2025 (circa US$26 billion), against a backdrop of around 60% total market share.

Peter Huijboom, Global CEO, Media international markets, dentsu said:
“For years now we’ve seen the industry pivot towards digital, more than doubling investment in the last five years, thanks in part to the almost unlimited potential to reach, engage and sell to individual consumers. It has been one of the big drivers for growth, but with finite marketing budgets available to brands – it’s clear we are now starting to reach a point of digital maturation within the campaign mix alongside more traditional channels.

“There are still some markets, for example India where the digital potential is in its adolescence, who continue to see rapid growth in digital spending – contributing to the global uplift. But it is also through innovations in tech, updated platforms, new channels and changes in planning behaviors, we’ll retain this consistent growth within digital investment worldwide.”

Digital spend is expected to reach US$424.3 billion by the end of 2023, accounting for 58.3% of all advertising spend, this will increase further to 59.1% share in 2024 and 60.3% in 2025**. Emerging digital categories are expected to continue to experience high growth in 2023, such as retail media (18.0%) and connected TV (15.2%). The preference for programmatic buying is also on the up, with advertising spend transacted programmatically forecast to increase by 14.4%, to reach 71.4% share of digital spend in 2023.

From a channel perspective, the 2023 dentsu Global Ad Spend Forecasts outlook is now showing a mixed forecast with perhaps, most notably, a drop within the television ad spend for the year. TV ad spend is now expected to fall by -3.1%, totaling US$170.2 billion by end of year, which in itself appears to be a temporary blip in its typically upward spending trend, with positive growth returning for 2024 onwards.

Except for print ad spending, which continues its decline (-4.8%), the other media channels are holding ground, with incremental year on year increases for Out-of-Home (+3.8%), cinema (+2.1%) and audio (+0.8%). “This pattern of spending, based on our long-term extrapolations, could see Out-of-Home surpass print spend and become the third most popular format, sometime during 2026,” observes Huijboom, who adds: “Of course, we’re excited about the impact Generative AI could have on our industry with the arrival of new in-channel opportunities for brands to embrace, so we’ll need to see if it remains the case.”

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