Dentsu downgrades 2024 adspend forecast as inflation bites

Dentsu’s Global Ad Spend Forecast expects global advertising to increase by 4.6% to $752.8bn in 2024.

Adspend growth in 2024 is expected to remain above 4% for each quarter in 2024 and is anticipated to peak in Q3 at 5.5% because of major sports events like the Paris Olympics and Paralympics, an UEFA Euro tournament.

This is a slight downgrade from the previous forecast of 4.7%, but ahead of predicted 2.7% year-on-year growth in 2023.

Digital ‘main driver’ of growth despite slowdown

However, this 2023 growth has been “driven” by media inflation. Adspend at constant prices was actually declining by 0.7% based on the top 12 markets that represent 86.7% of global spend.

This is anticipated to continue to have “a significant influence” on growth in 2024 as well with global adspend at constant prices projected to increase by 2.5% compared to 2023.

By channel, while digital is forecast to make up 58.8% of global adspend in 2024, it is forecast to experience a “slowdown”. Digital spend will halve from actual 14.8% in 2023 to forecasted to between 6.2% and 6.5% over the next four years.

Nevertheless, digital will still make up the majority of global adspend and “be the main driver” of growth capturing the most incremental ad dollar investments, according to the report.

The US presidential election and other major political and sporting events will present “significant media opportunities” for advertisers in 2024, as well as the long-awaited deprecation of the third-party cookie, the introduction of an ad tier on Amazon Prime Video, “concrete and scalable” generative AI applications (like translation for podcasts).

Will Swayne, global practice president for media, Dentsu said: “Despite the current worldwide geo-political instabilities and economic outlook, in 2024 we can see how significant major political and sporting events are for creating positive growth in ad spend.”

On average, adspend per capita for 2024 this sat at $139 per capita across the world, 75% more than what was spent 20 years ago.

Analysis also found adspend would represent, on average, 0.75% of gross domestic product (GDP) in the countries tracked.

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