Zenith has released its latest report, Advertising Expenditure Forecasts, which has found global advertising expenditure is forecast to grow 8.0% in 2022.
Looking specifically to Australia, the total ad market is forecast to grow by 8%-9% in 2022.
Elizabeth Baker, Zenith Australia’s national head of investment, said: “So far this year, we have seen relative stability in revenue and audience. Revenue growth was slightly below our initial expectations for Metro TV, Outdoor and Radio, though they remain on a positive trajectory.
“However, these more muted results have been more than offset by digital revenue growth which, to date, has exceeded our original forecasts, driving the total market ahead YOY.
Elizabeth Baker, Zenith Australia national head of investment
“As a result, we have upgraded our overall 2022 forecast to growth of 8%-9% in Australia. The outlook for 2023 and 2024 is also positive, with forecast increases of 4.7% and 4.3% respectively,” she added.
The report noted that on a global scale sustained growth in demand from advertisers is pushing up media inflation, particularly in television, where the supply of audiences is falling steadily as viewers switch to alternatives.
Price rises vary widely for different audiences in different countries, but the global average cost of television advertising across all audiences is expected to rise by 11%-13% this year.
Online video prices are expected to increase by about 7%, although in this case the supply of audiences is rising. Other digital channels where supply is climbing and volumes are flexible are inflating only modestly, with 3% average price rises forecast for social media and other digital display.
Out-of-home and radio prices will go up about 4% this year, while print prices will remain stable, because demand for advertising in printed publications is falling as rapidly as readership.
Brands that simply buy broad audiences to achieve reach targets will not be able to avoid having to spend more to reach the same audiences, according to the report.
But brands that use first-party data to identify their most profitable customers, and combine it with third-party data to target their best prospects in the most efficient channels, will be able to mitigate much of the effect of media inflation.
The huge and growing volume of digital content consumption is making it more effective for brands to scale by aggregating digital audiences.
Zenith predicts 62% of ad budgets will be spent on digital media in 2022, up from 59% in 2021, and that this proportion will reach 65% in 2024.
Joshua Lee, Zenith Australia’s national head of digital & data, said digital revenue for 2022 is poised to increase by +12% YOY, reaching over $3 billion per quarter by the end of the year.
“With Q1 already showing double-digit growth in all major digital categories, the trajectory for 2022 is promising. Video continues to show tremendous growth, offering the largest increase of 24% compared to last year.
“And when surveyed by the IAB, 74% of buyers shared they will continue to invest or increase investments in digital video ad formats, particularly in CTV and BVOD to extend the reach of linear TV.
“As both audience migration continues and daily CTV viewers increase (up 18% YOY to 8.5m Australians), brands can capitalise on the increased scale to still reach their audiences in an attentive and engaging environment.
“Nevertheless, sustainable growth in CTV will need to be driven by better buying frequency controls, proven efficacy of shoppable formats as a mid-to-lower funnel tactic, and greater use of first and second party data to unlock addressable targeting and creative personalisation,” said Lee.
Joshua Lee, Zenith Australia’s national head of digital & data