The global ad market is on course to continue its strong recovery from the struggles of 2020 by following up this year’s 15.6% growth with 9.1% growth in 2022, thanks to digital transformation, according to the latest forecasts from Zenith. The market will continue to expand by 5.7% in 2023 and 7.4% in 2024, with total ad spend reaching £681 billion by the latter.
Looking solely at digital ad spend, Zenith estimates that we will witness 25% growth this year, followed by 14%, 9%, and 10% growth over the next three years respectively. And, in 2022, digital advertising will exceed 60% of global ad spend for the first time, reaching 61.5%, before growing to a 65.1% share by 2024.
Breaking this down further, social media will grow at an average annual growth rate of 14.8% between 2021 and 2024, closely followed by online video at 14%. Zenith predicts that social media ad spend will reach £138 billion in 2022, overtaking the £136 billion expected to be spent on TV advertising. By 2024, social media will rise to £176 billion and account for 26.5% of all advertising, followed by paid search at 22.5% and TV at 21%.
“As consumers rely ever more on digital technology to connect and entertain them, and to inspire and fulfil their purchases, advertising is playing a greater role in driving sales and brand growth,” said Jonathan Barnard, Head of Forecasting at Zenith. “Over the next three years we expect the ad market to achieve its highest rate of sustained growth since 2000.”
The UK is forecast for more moderate growth than the global ad market, after its meteoric increase of 26.2% this year. Growth is expected to reach 6.3% in 2022, 4.6% in 2023, and 5.1% in 2024. This will mean UK ad spend hitting £27.8 billion this year and rising to £32.4 billion in 2024.
It’s important to note that these forecasts were made before the omicron variant began spreading across the world, and it’s currently too early to predict how that may affect the ad industry.
“It’s great to see brands continue to move money from traditional ‘trade’ marketing channels into the more accountable retail digital advertising channel. Brands can now get a much more accurate view and timely view of how their trade budgets are performing and also make significant efficiencies through better targeting,” said Richard Kirk, Chief Strategy Officer at Zenith UK.
“However, as with all digital channels, brands need to continue to invest in understanding true incrementality, vs sales where the consumer may have been exposed to an ad. In 2022, I look forward to seeing the better retailer media owners having the quality of their formats audited, so we can benchmark them on measures such as the attention they enjoy vs other channels.”