Global advertising growth will be 9.2 percent in 2022, previously forecast at 12 percent, media and intelligence investment firm Magna said on Tuesday, citing the economic slowdown and targeted restrictions on advertising data.
Globally, ad revenue from media owners will grow to nearly $828 billion, about 32% above the pre-COVID 2019 level, the company said.
Magna has always expected that the global advertising market will slow down significantly in 2022, following an unprecedented level of growth in 2021 (global + 23 percent, USA + 26 percent) caused by a unique “planetary design” in life. Factors: V-shaped economic recovery and post-COVID lifestyle marketing outcomes,” the company said. “Our expected decline” is due to two main factors: the global economic slowdown after the second quarter (GDP growth of 3.6%, according to the IMF, up from 4.9% six months ago) and the increasing restrictions on data. – Specific impact on digital advertising sales (e.g. impact of Apple iOS changes to display formats and social advertising).
Apple’s new policy prohibits the collection and sharing of certain data unless people choose to track it by ordering newer devices running iOS 14.5 or later. This affects ad personalization and performance reporting.
Magna noted that the 9% growth forecast for the current year “will continue to be higher than the pre-Kovid growth rate”, which averaged 7% in 2015-2019. But he also stressed: “The economic slowdown will definitely start to affect the ad markets in Q2 and Q3, and Magna expects low growth from Q2 to Q4 as well as throughout 2023.”
The company also said its cut to its 2022 forecast would be “much stronger if it weren’t for the stronger-than-expected first quarter recorded in most markets (+14% in the US). He added: “Expectations for growth would also be low were it not for the strong cyclical factors in 2022 – the US midterm elections. And the FIFA World Cup (Qatar, November).
Without cyclical advertising dollars, according to Magna, TV revenue growth in 2022 would have been less than 2% from this year’s 4%.
“Most of the headwinds in the ad market were to be expected this year,” said Vincent Letang, executive director of global market research at Magna and author of an advertising report. “Most of the headwinds in the ad market this year were to be expected: a post-2021 economic slowdown, persistent supply issues leading to inflation, and increasing privacy restrictions that slow the growth of digital ad formats. In addition, the war in Ukraine is exacerbating inflation and economic uncertainty.
He concluded, “However, Magna believes full-year ad revenue will continue to grow at a healthy pace in 2022, leading to a strong start to the year in addition to organic and cyclical factors.” Among the organic growth drivers, the company cited “continuous and extensive spending on e-commerce and digital marketing adoption.”
Letang also stressed that organic and cyclical factors and the “strength of developed or recovering verticals” such as travel, entertainment, gambling and technology “generate sufficient marketing demand to avoid headwinds and keep the advertising economy growing.” . all year round”. .”
Source: Hollywood Reporter
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