The summer update of MAGNA’s Global Ad Forecast predicts media owners advertising revenues will reach $842 billion this year, +4.6% growth vs. 2022. This 2023 growth forecast is just 0.2 percentage points below MAGNA’s previous forecast as the deterioration of economic conditions and marketing spending in most Western markets is mitigated by stronger-than-expected growth in some markets (China, Spain), industry verticals (Retail) and media types (Retail, Social).
Several industry verticals show counter-cyclical patterns in their marketing dynamic. Some are expected to grow strongly, in line with business recovery (Automotive, Travel), some are not necessarily expected to grow (Retail). CPG/FMCG product categories are ramping up their spending with Search and Retail Media Networks, partly at the expense of traditional branding media, but mostly by reallocating trade marketing budgets, thus bringing new money in the advertising ecosystem.
Retail Media Networks are expected to generate $121 billion in advertising sales this year (+12%), most of it in the form of product search and ecommerce sponsorship. The bulk of these ad sales will come from ecommerce pure players, but traditional retailers are developing their media capabilities and their advertising sales will grow by +24% to reach $21 billion.
Vincent Létang, EVP, Global Market Research at MAGNA, and author of the report, said:
“Advertising spending slowed down to a halt in the first quarter of 2023 (+1.5% globally, flat in most Western markets) due to economic uncertainty and the lack of cyclical drivers. There are, however, some drivers mitigating the impact of economic slowdown: Ecommerce and Retail Media bringing more marketing dollars into digital advertising formats, and the counter-cyclical dynamic of some large industry verticals (Retail, Auto, Travel). On balance, MAGNA expects the global marketplace to keep growing this year, as it managed to do during the brutal COVID recession of 2020. But of course – like in 2020 – traditional media formats and mature markets will struggle this year. Innovation keeps the market moving, however: traditional media owners are developing cross-platform capabilities and brand-safe addressable solutions that are increasingly attractive to brands, and now account for 19% of their advertising revenues.”