TEN TAKEAWAYS
1.The winter update of MAGNA’s “Global Ad Forecast” predicts that global media owners net advertisingrevenues (NAR) will reach $853 billion this year, +5.5% above the 2022 level, and will grow by +7.2% in2024.
2.Advertising spending accelerated by +6.3% yoy in the second half of 2023 following a weaker first half(+4.7%) to average +5.5 growth full year.
3.Traditional media owners from the TV, Audio, Publishing and OOH industries, are typically vulnerable duringthis slow, uncertain macro-economic climate, causing 2023 TMO ad revenues to shrink by -4% to $266bn.
4.TV advertising revenues are shrinking by -6% this year to $158bn while Publishing ad sales drop -5%, AudioMedia drops -2%, and Out-of-Home keeps growing +7% to reach $32bn (back to pre-COVID market size).
5.Digital Pure-Play media owners (DPP) ad revenue, on the other end, grew by +9.4% to $587bn (69% of totalad sales). DPP ad sales are driven by organic growth factors incl. the rise of ecommerce, retail media.
6.Keyword Search remains the most popular ad format, approaching the $300bn milestone this year (+9% to$298 billion). Social Media owners (e.g., Meta, Tiktok) re-accelerate (+15% to $182bn), while short-formpure-play video platforms (e.g., Youtube, Twitch) grow by +9% to $70bn.
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7.The fastest-growing market this year is once again India (+12% to $14bn) while China recovers from zeroCOVID (+9.8%) while Northern European markets slow down: UK +3.9%, Germany +2.5%.
8.The Asia Pacific advertising economy grew by +8.2% this year, higher than the global average of +5.5. Growththis year is powered by India, Pakistan, and China, which will all grow by more than +10% in 2023.
9.Digital advertising revenues are the driver of growth in APAC. Search advertising revenues increased by+9.9% in 2023 and represented 48% of total digital advertising revenues.
10.Automotive, Travel, and Pharma will be among the fastest-growing ad spending verticals next year.CPG/FMCG brands will benefit from lower inflation, retail media opportunities and sports events. On theother hand, Entertainment marketing may suffer from the lower-than-usual volume of US shows and moviesbeing released.
Vincent Létang, EVP, Global Market Research at MAGNA and author of the report, said:
“As expected by MAGNA back in June, advertising spending re-accelerated in the second half of 2023 after four slow quarters from mid-22 to mid-23. The recovery is driven by easier year-over-year comps and stabilizing economic conditions (inflation slowdown), and these improvements mostly benefit pure-play digital advertising formats. Search formats are driven by retail media; Social and Video formats recover to double-digit growth thanks a better monetization of the fast-growing short vertical video impressions. Meanwhile traditional media owners’ ad revenues – including their digital ad sales – are down by -4% this year (TV -6%). The cyclical events of 2024 (sports, elections) will make reach media and contextual advertising attractive again and stabilize TMO ad revenues: overall +2%, TV +3%.”
APAC AD FORECAST: +8.2% IN 2023
DIGITAL FORMATS DRIVE APAC IN 2023
APAC’s Remarkable Growth in Advertising Economy
The Asia Pacific region has demonstrated a remarkable growth trajectory in the advertising sector, surpassing global averages significantly. According to MAGNA’s latest Advertising Forecast for December 2023, APAC’s advertising economy grew by 8.2% this year, eclipsing the global average growth rate of 5.5%. This impressive performance is an uptick from the previously projected growth rate of 7.1% for the region in 2023.
Linear vs Digital: A Shift in Advertising Revenues
In the APAC region, there’s a notable shift in the composition of advertising revenues. Linear advertising revenues, encompassing traditional media formats, have seen a slight decrease of 0.4%, totaling $74 billion. This accounts for 26% of the total advertising budgets in APAC. On the other hand, digital advertising revenues have witnessed a robust growth of 11.6%, now representing a dominant 74% of the total advertising budgets.
Television and OOH: The Linear Landscape
Television advertising revenues in APAC, combining both linear and digital formats, are experiencing a decline of 1.9% year-over-year. However, Out-of-Home (OOH) advertising stands as the sole linear format in APAC witnessing growth, with an 8% increase in 2023, indicating a resilient demand for outdoor advertising spaces.
Digital Advertising: The Engine of Growth
The driver behind APAC’s advertising revenue growth is predominantly digital advertising. Search advertising, in particular, remains the largest portion of digital revenues, amounting to $100 billion. This segment saw a 9.9% increase in 2023, making up 48% of the total digital advertising revenues in the region. The surge in search advertising is largely driven by retail media platforms, especially in China’s robust digital marketplace.
Social Media’s Strong Performance
Social media advertising revenues have strengthened considerably in 2023, growing by 16% to reach $68 billion. This growth, constituting 32% of total APAC advertising revenues, is primarily fueled by the extensive use of mobile devices across APAC markets, with many consumers relying solely on smartphones for internet access.
The Future Outlook: Digital Continues to Ascend
Looking ahead to 2024, total advertising revenues in APAC are expected to increase by 6.3%, reaching $304 billion. This growth will be a mix of a slight increase in linear advertising revenues and a more substantial rise in digital advertising revenues. The forecast indicates that by 2028, digital advertising revenues will represent 81% of total budgets in APAC, a significant increase from 74% in 2023.
Leigh Terry’s Insight on APAC’s Growth
Leigh Terry, CEO of Mediabrands APAC, provided valuable insights into the region’s advertising economy: “The Asia Pacific advertising economy grew by 8.2% this year, higher than the global average on 5.5%, and powered by growth markets like India (+12%) Pakistan (+11%) and China (10 %).”
Conclusion: APAC’s Dominance in the Global Advertising Market
MAGNA’s Advertising Forecast for December 2023 paints a clear picture of APAC’s dominance in the global advertising market, driven by the exponential growth of digital formats. This trend signifies a pivotal shift in advertising strategies and highlights the increasing importance of digital platforms in reaching consumers effectively.
For more information on APAC markets such as China, Australia, Japan, India, South Korea, Indonesia, Thailand, Hong Kong, Malaysia, Taiwan, Philippines, Singapore, New Zealand, Vietnam, please contact Naomi Michael at naomi.michael@mbww.com.
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About The Research
The MAGNA market research is media centric. It estimates net media owners advertising revenues based on an analysis of financial reports and data from local trade organizations; other ad market studies are based on tracking ad insertions or consolidating agency billings. The MAGNA approach provides the most accurate and comprehensive picture of the market as it captures total net media owners’ ad revenues coming from national consumer brands’ spending as well as small, local, “direct” advertisers. Forecasts are based on economic outlook and market shares dynamic. The full Ad Forecast report (80 pages) and dataset contains more granular media breakdowns and forecasts to 2027, for 70 markets.
About Magna
MAGNA is the leading global media investment and intelligence company. Our trusted insights, proprietary trials offerings, industry-leading negotiation and unparalleled consultative solutions deliver an actionable marketplace advantage for our clients and subscribers.
We are a team of experts driven by results, integrity, and inquisitiveness. We operate across five key competencies, supporting clients and cross-functional teams through partnership, education, accountability, connectivity, and enablement. For more information, please visit our website: https://magnaglobal.com/and follow us on LinkedIn.
MAGNA has set the industry standard for more than 60 years by predicting the future of media value. We publish more than 50 reports per year on audience trends, media spend and market demand as well as ad effectiveness.
To access full reports and databases or to learn more about our market research services, contact forecasting@magnaglobal.com.
About IPG Mediabrands
IPG Mediabrands is the media and marketing solutions division of Interpublic Group (NYSE: IPG). IPG Mediabrands manages over $47 billion in marketing investment globally on behalf of its clients across its full-service agency networks UM, Initiative and Mediahub and through its award-winning specialty business units Healix, Kinesso, MAGNA, Matterkind, Mediabrands Content Studio, Orion Holdings, Rapport, Reprise, and the IPG Media Lab. IPG Mediabrands clients include many of the world’s most recognizable and iconic brands from a broad portfolio of industry sectors including automotive, personal finance, consumer product goods (CPG), pharma, health and wellness, entertainment, financial services, energy, toys and gaming, direct to consumer and e-commerce, retail, hospitality, food and beverage, fashion and beauty. The company employs more than 18,000 diverse marketing communication professionals in more than 130 countries. Learn more at www.ipgmediabrands.com.
