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It could be a chillier summer than expected for advertisers—Dentsu has trimmed its global ad-spending forecast, citing “macroeconomic factors.”
The numbers: Dentsu expects global advertising spend to grow 3.3% this year to reach $728 billion, according to a report released on May 31. In December, the company had predicted 2023 growth of 3.8%. (Dentsu spokesperson Brittany Hescheles said this initial prediction was ultimately adjusted to 3.5% due to “hyperinflation in a couple of markets.”)
- The growth Dentsu is expecting to see this year is attributable to “media price inflation,” per the report, not an increase in advertising. Not great, Bob. Without the impact of inflation, Dentsu said ad spend would actually fall 0.6% year over year in 2023.
- Next year, Dentsu expects advertising spend to grow 4.7% to nearly $763 billion. You know, if there aren’t any more adjustments. It credited the uptick to tentpole moments like the US presidential election and the UEFA Euro Championship.
Synced up: In March, IPG-owned Magna cut its 2023 global ad spending forecast from 4.8% to 3.4%.
Going steady: Digital advertising will account for nearly $3 in every $5 spent on advertising for the next three years, or about 58% this year, according to Dentsu. However, in 2023, it’s only expected to rise 7.8%, a single-digit increase that’s only happened twice in the last two decades—during the 2009 financial crisis and in 2020, when the pandemic first hit.
“It’s clear we are now starting to reach a point of digital maturation within the campaign mix alongside more traditional channels,” Peter Huijboom, global CEO of Dentsu’s media international markets, said in a press release.