Global advertising revenue grew 6.5% this year and is projected to increase 5.9% in 2023, according to GroupM’s global year-end industry growth forecast. Meanwhile, Magna’s December global ad forecast predicts 4.8% growth in 2023 after 6.6% growth in 2022. These estimates have been revised downward from forecasts earlier this year, when GroupM predicted an 8.4% growth rate for 2022. Magna had previously predicted a 9.2% growth rate for this year and a 6.3% growth rate for 2023.
“GroupM is heading into 2023 with an outlook of ‘conservative optimism.’ That is what we are hearing from advertisers on their earnings calls, so that is where our heads are at until we see something that forces us to change our minds,” commented Kate Scott-Dawkins, Global Sirector of Business Intelligence at GroupM.
Meanwhile, Magna is on the same page, “although we will likely see a slight slowdown in advertising revenue growth in an uncertain economic environment,” added Luke Stillman, SVP and Group Director of Global Market Intelligence at Magna, who also anticipates growth should reaccelerate during the second half of the year.
One area where GroupM upgraded its numbers from its September forecast was CTV. “CTV did not decline in Covid. Unlike traditional TV, it saw continued double-digit growth. We are expecting that growth to continue to offset some of those incremental declines that we are seeing across TV as that reach erodes,” Scott-Dawkins said.
The broadcast subscription rate in the United States is continuing its slow fall, according to GroupM. Pay TV penetration has tumbled from 91% in 2010 to less than two-thirds of the US population in 2022. By next year, the rate is set to fall again to roughly 60%, with an expected drop to just shy of 50% by 2025.
Otherwise, although streaming services are growing more quickly than many other segments, there will continue to be share shifts rather than huge incremental growth, according to the study. Although digital video growth will help offset linear declines in 2023, it will not offset them completely. Even streaming services like Netflix and Disney+ launching ad-supported tiers will not be enough to replace the revenue.
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