Media Buying Briefing: The latest media agency estimates for 2023 revenue are out and they remain, well, upbeat

By Michael Bürgi

Most economic prognosticators will tell you 2023 is either going to be a tough start with a happy finish, or just a slog all the way through, as parts of the world battle deeper recessionary trends and others still find ways to grow.

Ask the major holding company media agency analysts — namely, GroupM and Magna — and they continue to hold a more positive, if slightly tempered outlook on 2023 given strong results for 2022 despite the fact that the long-term prognosis isn’t great.

“Despite recent headlines warning of a Big Tech bust and a digital advertising slump, we expect both forms of digital advertising [both pure-play digital and digital iterations of traditional media] to grow double digits in 2022,” wrote Kate Scott-Dawkins, global director of business intelligence at GroupM in the network’s latest report, out today.

GroupM revised its 2022 global advertising growth to 6.5% (excluding U.S. political ads), down from 8.4% it had forecast back in June. Scott-Dawkins attributed the drop primarily to tempered growth in China — taking China out of the equation, GroupM expects 2022 to end up at 8.1%.

As for 2023, GroupM predicts global advertising growth of 5.9%, and Scott-Dawkins attributed that to strength in connected TV, retail media and markets that remain fast-growing like India. Still that represents a drop from 6.4% which it predicted in June.

At IPG’s Magna unit, the revised forecast for global media revenue growth is 6.6% for 2022, down from 9.2% predicted back in June. And the 2023 outlook is also a bit tempered, revised from 6.3% growth globally to 4.8%. As with GroupM, Magna attributes much of the rollback to a reeling China, whose restrictive Covid policies and stringent digital regulations inhibited growth there.

“Ad spend is slowing slightly, but remains largely in line with our previous expectations,” said Luke Stillman, Magna’s senior vp and group director of global market intelligence.

(China factors in largely to the global picture since, together with the U.S. the two countries represent more than 55 percent of all ad spend, according to Scott-Dawkins.)

As would be expected, digital continues to generate the most growth, even after some of the major platforms hit potholes of one sort or another in 2022 — massive layoffs due to softer-than-expected revenue gains, greater scrutiny of TikTok from a governmental point of view and turmoil at Twitter under new ownership.

Magna predicts 8% growth in digital in 2023, or 65% of total ad revenue, driven by explosions in e-commerce and digital video primarily but with search staying steady and social recovering after some of the above-mentioned stumbles.

Perhaps the biggest surprise among all media is the expected growth rate of out of home media, which continues to enjoy faster growth ahead of all other media besides digital — and that’s due in part to its continued transformation to a digital medium. GroupM predicts OOH will grow 18.1% this year (excluding China), which is better than any traditional medium by far.

Likewise, Magna is calling for …read more

Source:: Digiday