Publicis Media-owned agency Zenith has reduced its forecast for global ad spend in 2022, with the war in Ukraine causing sharp regional decline.
The company published its Advertising Expenditure Forecasts report this morning. It predicts global advertising expenditure to grow by 8.0 percent in 2022; a drop from the 9.1 percent growth rate projected in December 2021.
While growth in North America (12 percent), MENA (7 percent) and Western Europe (6 percent) are unchanged, Central and Eastern European ad spend is set to fall by 26 percent. The report cites “severe disruption in Russia and its closest trading partners after the invasion of Ukraine,” but notes that most markets in the region will continue to grow.
Zenith added that Latin American growth was downgraded from 9 to 8 percent, while Asia Pacific was upgraded from 6 to 7 percent, emphasising strong performance from India; the fastest-growing market, set for 20.8 percent expansion this year.
Video fast-forwards ad spend
Online video is forecast to be the fastest-growing channel over the next three years. Zenith predicts the “rapid development” of CTV and AVOD streaming – as well as the introduction of ad-funded tiers by Netflix and Disney+ – to drive 15.4 percent average annual growth. As a result online video ad spend will climb from $62 billion in 2021 to $95 billion in 2024, according to the report.
Social media meanwhile has an average annual growth forecast of 15.1 percent, driven by “rising competition among platforms” and close integration with commerce. Social media ad spend is projected to rise from $153 billion in 2021 to $187 billion in 2022, at which point it will account for 25 percent of total media ad spend.
Linear television advertising is also expected to rise at 1.1 percent average annual growth over the next three years, from $173.6 billion in 2021 to $179.2 billion in 2024. Zenith predicts price rises to continue compensating for loss of audiences, as ongoing decline in reach drives brands to digital channels “including online video.”
“Online video is growing by creating new opportunities for building brand awareness, complemented by social media’s capacity for cost-effective targeting with low barriers to entry,” said Jonathan Barnard, Head of Forecasting at Zenith. “Online video is steadily narrowing the spending gap with television, and will be half as large as television by 2024.”
