Dentsu’s growth figure is not too far from that published in May by the advertising holding company, which at the time spoke of a 4.7% increase in global advertising investment.
Global advertising investment will grow by 4.6% to $752.8 billion in 2024. This is what Dentsu predicts in its latest projections for the coming year. Dentsu’s growth figure is not too far from the one published last May by the advertising holding company, which at that time spoke of a 4.7% increase.
The numbers put on the table by Dentsu are rather conservative in nature, at least when compared to the predictions of its rivals. Just a few days ago, WPP’s GroupM predicted that worldwide advertising spend would grow by 5.3% over the next year, when the industry is expected to adjust gradually to inflation, the adverse global economic environment and the ongoing wars between Israel and Hamas and between Russia and Ukraine.
Even more optimistic is the forecast from Magna (IPG Mediabrands), which predicts that global advertising spend will increase by 7.2% in 2024.
Although events such as the European Football Championship, the Paris Olympics and the U.S. presidential election are expected to boost investment in 2024, the modest growth figures predicted by Dentsu take into account media price inflation. And if prices were to hold steady, global ad spend would grow by just 2.5% over 2023, according to Dentsu.
For the first time, Dentsu’s study goes beyond assessing financial data and also looks at advertising spend in relation to broader macroeconomic factors such as market demographics and GDP.
In this regard, Dentsu predicts that by 2024, global advertising spend will account for 0.75% of GDP in the 12 largest ad-spending markets worldwide (Japan, the UK and the US, among others). This is in line with the figures for the last 20 years.
Advertising pressure is increasing
Dentsu’s research concludes that advertisers are shelling out more money to connect with audiences and that as a result those audiences are also facing increased advertising pressure.
“Audiences are receiving an ever-increasing volume of ads, so finding new ways to sting advertising effectiveness has never been more important,” says Will Swayne, global practice president for media at Dentsu.
Connected TV is the fastest growing channel in 2024, according to Dentsu. This channel will see year-on-year growth of 30.8%, driven by the addition of advertising formats to an increasing number of streaming video platforms.
Moreover, while digital advertising spend is stabilizing, this channel will continue to be the main growth driver for the advertising industry in the coming months.
Dentsu anticipates that digital advertising revenues will grow by 6.5% in 2024 to reach $442.6 billion (and will gobble up 58.8% of global ad spending).
Retail media is also growing strongly, and will grow by 17.2%. Programmatic advertising channels, which account for more than 70% of digital ad spend, will also see double-digit growth (+10.2%).
Unlike GroupM and Magna, Dentsu is quite optimistic about advertising investment in the increasingly sluggish television sector. After two consecutive years in free fall, the small screen will grow by 2.9% in 2024, accounting for 23% of spending.
By region, the Americas will overtake Asia-Pacific as the region with the most dynamic growth in advertising spending in 2024. Spending in the Americas will grow by 5.8% next year, compared to 2.5% in 2023. Asia-Pacific will grow by 4% in 2024 (up from 3.5% in 2023), while the Europe, Middle East and Africa region will post growth of 2.7% (up from 1.9% last year).
