Advertising Spend Archives

In News

Global Ad Spend on the Rise, but Digital Growth Is Slowing

July 10, 2023 No Comments

Spending is forecast to reach $727.9 billion in 2023, and increase 4.7% next year

Advertising spend is expected to grow globally this year, with inflation driving it to $727.9 billion and $3 of every $5 going to digital channels over the next three years. However, according to Dentsu’s latest biannual global forecast, digital spend is likely to slow to single-digit growth in the future.

Dentsu is predicting a 3.3% rise globally in ad investment this year—up $23 billion from 2022—followed by a further increase of 4.7% in 2024 and 3.8% in 2025. The growth forecast has been downgraded by 0.2% since last December’s report due to macroeconomic factors.

The forecasts are provided for 58 markets including the Americas, Europe, Middle East and Africa, and Asia-Pacific across digital, television, print, out-of-home, audio and cinema.

Putting on the brakes

The previous forecast from Dentsu revealed that following a period of record spend, the ad sector would see a slowdown this year and in 2024 it’s expected to accelerate again to reach $762.5 billion, partially due to the Olympics and Paralympics in Paris, the UEFA European Championship and the U.S. presidential election.

We still expect global advertising spend to grow despite the economic uncertainty.

Peter Huijboom, CEO of international media, Dentsu

Digital ad spend will grow to $424.2 billion this year and account for 58.3% of all ad spend, increasing to 59.1% in 2024. While digital ad spend will continue to grow, it is expected to at a slower pace, 7.8% this year.

Emerging digital channels such as retail media and connected TV will remain in high demand, while programmatic buying is also set to increase by 14.4% to reach 71.4% of digital spend in 2023.

In revealing the latest forecast, Peter Huijboom, CEO of international media at Dentsu said: “For years now we’ve seen the industry pivot toward digital, more than doubling investment in the last five years thanks in part to the almost unlimited potential to reach, engage and sell to individual consumers. It has been one of the big drivers for growth, but with finite marketing budgets available to brands—it’s clear we are now starting to reach a point of digital maturation within the campaign mix alongside more traditional channels.”

He added that markets such as India, where digital was still in its “adolescence,” would continue to witness rapid growth in spending. Tech and platform innovations, alongside new channels and changed planning behaviours, would also mean that digital investment would still see “consistent growth” worldwide.

“We still expect global advertising spend to grow despite the economic uncertainty,” Huijboom highlighted in the report. “However, media price inflation is the true driver of this increase and hides the more lacklustre reality: 2023 will be a flat year for ad spend.”

Asia-Pacific is projected to grow the fastest in 2023 by 4.6%, followed by the Americas by 2.9% and EMEA by 1.9%. Earlier this year, reports on the U.K. market indicated that advertising spend there would virtually stagnate, with growth in spend of only 0.5%.

The Americas will witness the largest growth in ad spend at $334.9 billion

Spending increases across most media

One of the categories set to decline will be TV ad spend (-3.1%) at $170.2 billion by the end of the year, with positive growth expected to return next year. Print advertising will also continue to decline by 4.8% to $48.4 billion.

Media channels set for year-over-year increases are out-of-home (3.8%), cinema (2.1%) and audio (0.8%).

Search investment will be up by 8.9% to $150 billion, with search behaviour expanding from traditional search engines to social media and commerce platforms through innovation powered by artificial intelligence.

The forecast had not yet researched the impact that generative AI could have on the advertising sector and the potential opportunities it could afford brands, but it was mentioned by Huijboom as something that will be monitored in the future.

“Of course, we’re excited about the impact generative AI could have on our industry with the arrival of new in-channel opportunities for brands to embrace, so we’ll need to see if it remains the case.”

Feature Image Credit: Getty Images

By Stephen Lepitak

Stephen is Adweek’s Europe bureau chief based in Glasgow.

Sourced from ADWEEK

9 Tips for Getting the Best Value from your Advertising Spend During a Crisis

July 3, 2020 No Comments

Sourced from AdAge

As the fear of economic crisis looms on the horizon, companies have now had to cut back on their budgets. One of the first places that sees significant financial cuts is the marketing budget. As essential as these functions are for the growth and development of a business, a company needs to manage its marketing spending in line with what it earns. With less disposable income available in the broader economy, it makes sense for businesses to look at ways to shave budget demands that aren’t critical to the company’s basic operation.

Even with this marketing spend cut, companies still want to develop campaigns that keep their products and services within the public eye. The only way for that to happen is to be more efficient in their advertising spend. Getting the most value for the smaller ad budget available should be the most critical of a business’s marketing goals.

These entrepreneurs from Ad Age Collective are familiar with making the most of a shoestring budget. We asked them to share their insights on how businesses can get the most value out of tiny advertising budgets. Here’s what they had to say.

1. Start with research.

You need to understand what your audience is going through before you launch any ad campaigns. Are they in a position to buy? Are all other systems such as logistics working? It only makes sense to advertise if people can still carry out normal buying activities. Learn about what’s happening with your audience so that you can make better decisions. – Syed Balkhi, WPBeginner

2. Focus on results.

This is a crucial time for many businesses and it has never been more important to focus on advertising spend that is directly attributable to a result. This may mean temporarily reducing your brand spend in favor of investments in performance-oriented marketing. Keep an eye on cost per acquisition — it’s everything right now. – Michael Lisovetsky, JUICE

3. Amplify earned media.

Find positive articles written about your company or the problems your solutions solve for customers and amplify those articles via social media. This way, you combine the credibility of third-party media with the precision targeting of digital advertising to get the most bang for your buck. By combining them in this way, you’ll fully leverage your public relations efforts and your ad dollars. – Dan Beltramo, Onclusive (formerly AirPR)

4. Be flexible and listen.

During a crisis — and before — brands need to build in flexibility on their spend and be able to shift messaging quickly. Don’t do something off-brand, but show you are listening and have empathy. Turn to social or earned media in times of crisis to reach your audience quickly and authentically. And if able, realign ad spend and messages to address consumer needs at that time and as they change. – Maggie O’Neill, Peppercomm

5. Invest more in acquisitions and SEO.

With many advertisers pulling back on ad spend and customers spending more time online, now’s the time to invest in acquisition efforts. CPMs are down with decreased demand and increased inventory, so prioritize high- and mid-funnel messages to build brand awareness, recall and trust. Also consider investing more in SEO. A high-quality, relevant online experience will help maximize sales potential. – Chad Robley, Mindgruve

6. Do fewer things and do them better.

Focus on a few things and choose them based on areas where you have the highest propensity to succeed. Build in the industries you already have built a reputation. Finally, go for one call to action and pour your heart into it. Remember, if you went on a first date and liked the person, all you’d want is a second date. What is your call-to-action equivalent of a second date? – Arjun Sen, ZenMango

7. Tie advertising efforts directly to revenue.

Marketers and advertisers often despise sales, preferring to live in the world of ROI based on impressions, awareness and engagement. As antithetical as it may feel, in a crisis you need to make your peace with sales. Tying your advertising efforts directly to revenue in the short term will benefit your organization and give you resources to invest in longer-term initiatives as the crisis subsides. – Patrick Ward, Rootstrap

8. Send the right message to the right people.

With several industries decreasing or eliminating their media spends, budgets can now go further than ever, so without sophisticated audience segmentation brands run the risk of hitting the same customers over and over or delivering ineffective messages to the wrong people (while results look better than before). It is time to segment your audiences more deeply to make the best use of the budget. – Reid Carr, Red Door Interactive

9. Seize the competitive advantage and connect emotionally.

To win during and after a crisis, brands do two things: 1) As others cut ad spend, they seize competitive advantage to assure their brand’s share of voice is higher than its share of market; 2) They shift messages to connect emotionally at scale, displaying true commitment to serving communities and customers. The lift in brand affinity, purchase intent and, ultimately, market share gains deliver peak ROI. – Sean Cunningham, VAB

Sourced from AdAge

Why You Should Spend More On Advertising Than Any Of Your Competitors Or Die A Slow Death

August 1, 2019 No Comments

Sourced from B&T Magazine

In this opinion piece, founder and head of growth at digital marketing agency King Kong, Sabri Suby, speaks on why you need to be spending more on advertising than your competitors are, or face a slow death.

In the past decade, there’s been a huge migration of businesses moving online, in search of better clients and fewer overheads. Every man and his dog is jumping on the online advertising bandwagon, and it’s showing no signs of slowing down.

But if you think online marketing is a free ticket to an endless supply of leads that will cost you next to nothing, then you’re in for a rude awakening. If there’s one thing your business should never, ever cut corners on, it’s digital ad spend and acquiring new customers into your business.

Supply and demand

Digital advertising has now out surpassed TV as the number one advertising channel. Meaning the number of advertisers is increasing and the quality of the competition is rising – but the inventory available isn’t increasing at the same rate.

There are only so many humans on the planet, and they only spend so much time per day scrolling through Facebook or Instagram. The basic laws of economics will tell you what happens next: the cost per click across all channels is driven up, and up, and up.

Increased demand and higher cost of entry has sharpened the competition and kicked the chancers to the kerb. Small businesses want their ads showing up in potential customers’ newsfeeds – but so do McDonald’s and Uber Eats and Coca-Cola. In this supposedly level playing field, we’re all competing for the same people, but the big guys can spend a lot more to acquire a customer than a regular small business.

This doesn’t mean there’s no hope for the little guys; but it does mean that they need to step up, get smart and start learning how to spend their hard-earned money wisely.

The digital marketing sea is turning red with businesses that can’t survive the rising costs, leaving their skeletons dotted along the shoreline. These dying businesses are typically filled with lazy marketers who still think they’re back in the good old days, where the competition was weak and winning was easy.

They spend the majority of their time plotting out how they can spend less, get the cheapest clicks, and reduce their costs. They reminisce about the times when all they had to do was put their ads in the Yellow Pages, sit back, and wait for the phone to ring.

Anyone who continues to think like this is going to get eaten alive by those who truly understand the cost of acquiring good customers. The business that can afford to spend the most to acquire a customer will always win, every single time. If you stop thinking of advertising as a cost, and start realising that it’s an investment, the leads and clients will begin to flow.

This shift in mindset will allow you to justify spending more than any of your competitors, putting you one step ahead of the rest. You will be able to go out and market more aggressively than any of your competitors, allowing you to get all the customers and win.

Stop panicking and start learning

So, what if you want to start winning, but you’re scared to make the jump? Here’s the secret: stop spending all your time worrying about costs, and start educating yourself. In order to justify the increased spending, you’re going to need to know your numbers inside out.

Force yourself to understand the technology. Learn about CRMs. Discover how automation can help your business. Once all the pieces start to fall into place, increasing your ad spend won’t feel like such a risk – it will simply make sense.

And when you start to get your digital marketing right, you’ll be making so much money from your customers, that the rising costs of acquiring those customers won’t matter anymore. For every dollar you spend, you’ll get three, five or ten back.

When the results are that good, you’ll want to be putting in as many dollars as you can afford. And if you’re still too scared, don’t come crying to me about how your $10 boosted post didn’t generate you any leads.