Media agency Zenith expects television advertising spending to rise 3.2% in 2022, to $64.4 billion, in a year with a Winter Olympics and midterm elections.
Zenith sees network broadcast falling 2% to $15.9 billion, national cable down 5% to $19.2 billion and syndication dropping 9% to $2.2 billion. But with political spending exploding, spot is expected to increase 15% to $27.2 billion.
In 2023, the forecast is for a drop in TV spending, with broadcast, cable and syndication flat, but spot dropping 10% in a political off-year.
For 2024, Zenith sees TV spending rebounding in a presidential election year with spot jumping 20%. The agency sees broadcast, cable and syndication again flat.
Total internet ad spending is expected to increase by 16.6% to $218.2 billion in 2022, a slowdown from 33.7% growth in 2022. Internet video is seen climbing 20% to $41.1 billion.
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In 2023 internet advertising is seen rising 8.3%, posting another 11% worth of growth in 2024, with internet video rising 12% in 2023 and 15% in 2024. In North America unchanged at 12%.
Global advertising expenditures are forecast to grow 8% in 2022, according to Zenith’s latest Advertising Expenditure Forecasts report, published Wednesday. This represents a minor downgrade from the 9.1% growth rate Zenith published in December.
Growth will be supported by the Winter Olympics, midterm U.S. elections and the FIFA World Cup, which for the first time will take place in the most advertising-intensive period of the year in the run-up to Christmas.
Slowdown Seen in ‘23
Faced with this tough comparison, growth will slow to 5.4% in 2023, before the Summer Olympics and U.S. presidential elections help boost it to 7.6% in 2024.
Global linear television advertising is forecasted to grow by 1.1% a year on average between 2021 and 2024, from $173.6 billion to $179.2 billion, as price increases continue to compensate for audience losses.
This ongoing decline in reach and efficiency will drive brands to digital channels, however, including online video, the report said. Television’s share of total ad spend is forecast to fall from 24.6% in 2021 to 20.8% in 2024, while online video’s share increases from 8.8% to 11.1%.
The sustained growth in demand from advertisers is pushing up media inflation, particularly in television. Price increases vary widely for different audiences in different countries, but the global average cost of television advertising across all audiences is expected to rise by 11%-13% this year.
Online video prices are expected to increase by about 7%, although in this case the supply of audiences is rising.
“Brands that simply buy broad audiences to achieve reach targets will not be able to avoid having to spend more to reach the same audiences,” the report said. “But brands that use first-party data to identify their most profitable customers, and combine it with third-party data to target their best prospects in the most efficient channels, will be able to mitigate much of the effect of media inflation.”
Zenith predicts 62% of ad budgets will be spent on digital media in 2022, up from 59% in 2021, and that this proportion will reach 65% in 2024.
The agency predicts that online video will emerge as the fastest-growing channel over the next three years, with an average of 15.4% growth per year on average between 2021 and 2024. The growth will be fueled by the rapid development of connected TV, ad-funded video-on-demand, streaming and other video formats.
Zenith called connected TV a mainstream video platform in the U.S., with a higher penetration than cable TV, and noted that it is becoming established in other markets, especially in Western Europe and Asia-Pacific. The introduction of cheaper ad-funded tiers by subscription video-on-demand services like Netflix and Disney Plus will boost growth further by providing new high-quality environments for brand communication.
Online Video Spend to Rise
Zenith expects online video ad spend to rise from $62 billion in 2021 to $95 billion in 2024.
“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 for Zenith. “Online video is steadily narrowing the spending gap with television, and will be half as large as television by 2024.”
Ad spending has remained on track despite the macroeconomic headwinds that emerged this year, the Zenith report said. High inflation, concentrated in essentials like heating, gas and food, is forcing consumers to reprioritize their spending, particularly the less well-off, and has led to a drop in consumer confidence.
But for now, consumer spending continues to grow, as consumers demonstrate their strong appetite for the travel and entertainment experiences that were denied to them over the pandemic, the agency said. “Business confidence is generally high, and corporate investment is rising, and there is little evidence of widespread cost-cutting.” ■
