Australian ad spend growth is expected to remain flat next year with GroupM predicting a 0.9% increase in 2024 in the latest ‘This Year Next Year’ report.
The growth follows a flat 2023, which delivered a 0.2% increase in advertising investment due to the impact of high living costs, inflation, and increased mortgages, which have affected multiple sectors in the market, including the retail environment.
Melissa Hey, chief investment officer of GroupM Australia, said the local market experienced pockets of growth in 2023.
“The enduring popularity of VOD services, the ‘Barbieheimer’ effect on Cinema, and the strength of the Out-Of-Home market provided pockets of growth. Social continues to perform, and new entrants in the retail media space are accelerating growth.”
The report also showed how retail media is set to have massive growth in the year ahead, according to the GroupM report.
Despite being the smallest segment within digital, retail media added more than $10 billion in revenue in 2023. Revenue in 2023 is estimated to be $119.4 billion
Retail media is forecasted to grow 8.3% in 2024. By 2028, retail media revenue is expected to exceed linear TV and CTV combined.
“Pure play” digital is expected to finish the year up 9.2%, better than the June forecast of 8.4% (excluding U.S. political advertising), excluding the digital extensions of traditional media such as CTV and digital out-of-home (DOOH), but includes YouTube and TikTok.
By 2028, pureplay digital will be larger than the entire advertising industry was in 2022.
Out-of-home is forecast to grow 10.3% in 2023 but will not surpass 2019 levels until 2024. It is not expected to regain its pre-pandemic share of total ad revenue by 2028.
Television, including CTV, is the third largest channel for global ad revenue (behind search and ‘other digital’) and is expected to fall to 17.9% of the total in 2023. The report noted that the shares reflect the total advertising market and do not necessarily represent the budget allocations of large brand advertisers, where TV can account for a larger share.
Globally, GroupM is forecasting global ad spend growth to decelerate to 5.3% in 2024, showing an improvement in real terms, adjusting for inflation, yet still negative real growth.
The forecast estimates 5.8% global growth in 2023, in line with the June forecast.
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