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June, 2024

GroupM forecasts modest ad spend growth amid economic uncertainty

GroupM’s mid-year ad spend forecast for 2024 predicts a 7.8% global advertising revenue growth, reaching US$989.9 billion and surpassing one trillion in revenue in 2025. However, at a local level, GroupM economists project a modest overall growth across all channels at 1.1% for 2024, with stronger growth expected in 2025.

In Australia, digital biddable media is expected to represent 76% of ad spend in 2024, with search having the largest share at 37% of digital media. Retail Media is projected to increase by 28.6% in 2024, reaching $1.162 billion. Linear TV is forecast to decline 13.3% across 2024 to $2.85 billion, while Video-On-Demand is expected to grow 15.3%, resulting in total TV predicted to dip by 9.5% to $3.43 billion.

Digital-Out-of-Home now represents 75% of all Outdoor revenue, with growth across the channel forecast for 2024 at $1.246 billion (+7.3%). However, less than 10% of inventory is traded programmatically. The 2024 forecast for Cinema has been downgraded to +2.6% to reach $117 million due to significant box office declines year-on-year. The overall Audio landscape is expected to remain relatively flat at -0.1% ($1.237 billion), while digital audio, which includes podcasts and streaming, is projected to achieve double-digit growth with a rise of 16.4%.

“Economic uncertainty is front of mind for consumers, advertisers and politicians and continues to cast a shadow in Australia for the year ahead, but there are bright spots in the landscape,” said Melissa Hey, GroupM Australia & New Zealand Chief Investment Officer.

“Despite the economic challenges it’s positive to see growth in the year ahead. Based on the current economic conditions, we’re expecting overall ad revenue to increase 1.1% across 2024 to $23.5b before stronger growth returns in 2025. Retail Media is seeing accelerated growth, solidifying its position as a primary growth engine for brands, Podcasts and Streaming continue to drive growth in Audio, while the decline of Linear TV is slowing.”

At a global level, GroupM said the US and China together make up 57.1% of global ad revenue, adding $44.5 billion to their totals in 2024. They are also home to 22 of the top 25 global media sellers and more than 40% of global GDP.

Across channels, digital pure-play advertising will make up 70.6% of total revenue in 2024, equalling $699 billion. By 2029, digital will make up 74.9% of total advertising revenue, or $985.6 billion, according to GroupM. Within digital, the largest five companies (Google, Meta, ByteDance, Amazon, and Alibaba) accounted for 77.7% of the total in 2023, up from 65% in 2016.

Other Digital including social media and social video is predicted to grow 9.9% to $342.9 billion before growth is then expected to decelerate in 2025 to 7.5%.

Retail media is expected to represent 15.1% of total ad revenue in 2024, up from just 1.5% a decade ago in 2014. The channel remains the fastest growing segment of digital, forecast to add 17.5% in 2024 and 13.5% in 2025.

GroupM now expects CTV ad revenue to grow 20.1% to $38.3 billion in 2024 versus the $33.2 billion we forecast in December 2023 (using our new methodology).

With a nod to AI, GroupM also report machine-Generated Content could be 10% or more of total content-driven advertising by 2029, up from an estimated 2% in 2024. And it estimates 69.5% of revenue will be informed by AI in 2024, reaching 94.1% by 2029, three years earlier than previously forecast.

Total TV, including both linear TV and its digital extensions is expected to grow 2.7% to $163.2 billion in 2024, following a decline of 0.4% in 2023.

OOH advertising in 2024 is expected to grow 11.5% over 2023. And finally, Audio advertising is forecast to hit $27 billion in global revenue for 2024, up 0.8% over 2023.