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Global Ad Spend To Hit $880.9Bn This Year

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Global advertising spend is expected to rise by 8.3% – or $67.3bn – to $880.9bn this year, according to WARC report.

The expected rise is due to events in the second half of the year, most notably the US midterm elections and the men’s FIFA World Cup in Qatar this November. Market growth is then set to ease significantly – to 2.6% – in 2023, as investment is inhibited by cooling economic conditions and third-party cookie blocking online.

The new projections, based on data from 100 ad markets worldwide, amount to a downgrade of 4.3 percentage points (pp) to 2022 growth and 5.7pp to 2023’s prospects, compared to WARC’s previous global forecast in December 2021. Taken together, the new forecasts represent a reduction of almost $90bn in growth potential for the global advertising market this year and next.

Advertising holding companies – which serve many of the world’s biggest brands – have recorded a positive start to 2022, with all major firms upwardly revising forward guidance for the year ahead. Conversely, small to medium-sized businesses (SMBs), who largely buy ad space directly, are bearing the brunt of worsening economic conditions. A slowdown in SMB advertising activity will impact social media companies most – a sector already struggling to grapple with the impact of Apple’s new privacy measures. WARC expects social media ad spend to rise 11.5% this year (compared to +47.1% in 2021) then ease to just 5.2% in 2023 – the slowest rate yet for the sector.

Aside from businesses, consumers are also feeling the squeeze of soaring price inflation. This is particularly true among low earners for whom energy and food costs comprise a higher proportion of income. Wealthier consumers, however, have seen the value of their assets appreciate in recent years and are more likely to have received above-inflation pay rises – spending intentions among high earners remain bullishly positive per Deloitte monitoring. Sectors like technology & electronics (+11.5% in 2023), pharma & healthcare (+7.5%) and household & domestic (+6.5%) are expected to post healthy increases in advertising investment to capture any available disposable income.

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