Digital dominance: brands shift ad spend online in the hunt for results

Despite the uncertain economic and political climate around the globe, a sense of optimism is emerging in the advertising industry

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Worldwide ad spend looks set to outpace global economic growth in 2024, with a rise of 5% to reach $754.4 billion compared to a 3.2% real GDP increase, according to the updated mid-year Global Ad Spend Forecasts from advertising network dentsu and IMF data. 

Levels of ad spend are always a bellwether for the wider economy (tracking above GDP in good times, lower in leaner periods). But the boost in budgets is also due to rising levels of sophistication in reaching audiences and tracking the impact of advertising. 

“There’s greater confidence among marketers about the value and return that media and advertising will deliver to their brand and to their business,” says Will Swayne, global practice president - media, at dentsu. “With greater digitalisation of media, come greater accountability for the results, making a shift from advertising being seen as a cost to an investment for the business.” 

One reason for this growing faith in advertising’s accountability is the inexorable rise of spend through digital channels, which is forecast to grow 7.4% and to account for 59.6% of total global advertising budgets in 2024. 

The rapid growth of digital ad spend is reflected across nearly all industries but is most prominent in the finance and media sectors, which are forecast to see a 14.5% and 13.0% year-on-year digital ad spend growth respectively. 

Both are sectors that have previously had to reduce advertising spend and ‘do more with less’ in response to volatile and challenging economic circumstances. Yet after two years of tightened belts, we’re seeing marketers and advertisers in both sectors now look to expand their ad budgets and ramp up digital activity again. 

Travel advertising also continues its post-pandemic bounce back with an anticipated 11.2% increase digital spend, reflecting the creation of enhanced experiences, services and booking processes for travellers. 

Performance-based spend in areas such as paid search and digital display will continue to rise, especially where tech businesses such as Google and Microsoft build increasing amounts of AI-driven functionality into their advertising platforms. 

However, it’s noteworthy that the fastest growing channels are forecast to be retail media, CTV, and social media in 2024. All provide routes to audiences that enable advertisers to not only make a positive impact on short-term sales but also drive brand awareness. 

Retail media’s continued strong performance (it’s forecast to be the fastest growing digital channel at 32% in 2024 and 17.7% annually to 2026) is explained by stronger adoption in markets outside its traditional stronghold of the US. But also, because new ad formats are emerging beyond retailer websites and marketplaces, alongside higher standards of cross-channel measurement. 

Meanwhile, paid social media growth reflects that brands are embracing a wider range of opportunities - from commerce to social video, to social search. In addition, the busy news cycle in 2024 - with elections around the world and major sports events including the Olympics - is expected to boost levels of audience conversation and associated ad spend through the platforms. 

Beyond digital 

It’s also evident that television is a resurgent advertising medium, in rude health thanks to the growth of CTV budgets, which are forecast to rise by close to a quarter (24.2%) in 2024. 

CTV budgets will continue to flourish in the US, where the channel is well established, but also around the world as larger audiences become available to advertisers. Amazon Prime Video recently surpassed the 200 million subscriber mark, and Netflix’s ad-supported tier has an audience of 40 million. Competition in the CTV ad market from players such as Paramount+ and Disney+ is also expected to drive demand. And we are seeing just this with advertising growth in the media and entertainment category anticipated to reach 6.5%, after a rise of just 0.3% in 2023. 

These CTV platforms will also become more attractive to advertisers as they bring onboard stronger measurement and verification tools after the big streaming brands signed partnerships with research groups to better assess the impact of advertising on brand awareness, recall and sales lifts. These platforms are also developing ad-funded programming formats that provide the opportunity for advertisers to move the dial on brand metrics as much as on sales performance. 

“Advertisers want to be at the intersection of brand and performance,” says Swayne. “In continuing to build brand in these increasingly performance-driven platforms where the point of engagement and point of transaction are coming closer together.” 

The research also points to a boost in spend among consumer-packaged goods (CPG) advertisers as they look to invest and maintain the premiumisation of their brands. 

“These brands have continued to spend in a desire to drive sales volume, especially when many have applied pricing increases,” says Swayne.  “Plus, there is the desire to build distinctive identities in their premium brands, versus retailer-owned brands.” 

The willingness of businesses to invest in brand-related activity backed by clear performance metrics also explains the expected 4.2% uplift for global out-of-home (OOH) advertising in 2024. The main reason for the rise is the continued growth of digital OOH (7% in 2024 and then 8.6% in 2025). DOOH provides advertisers with the traditional brand-building strengths of OOH combined with sophisticated levels of data collection and analysis, together with connectivity to mobile advertising channels. 

OOH is also expected to benefit from a rise in spend from categories that traditionally spend more in the medium than others - especially travel and entertainment brands. 

Ad spend across regions 

In terms of the regional perspective, the Americas, APAC and EMEA are each forecast to post overall increases in ad spend. The fastest growth will come from the Americas due to election advertising in the US and the continued rapid expansion of the ad market in Brazil. 

Election spend alone in the US will contribute an extra $11 billion, a third of the total forecast rise in global ad spend. The addition of this extra budget pot will follow a strong advertising performance from Superbowl in February, an event that delivered the highest-ever ratings for a single network telecast. 

Brazil will continue on its upwards trajectory, recording the strongest rise in the Americas region with an 8.1% rise in spend, due to anticipated increases in budgets from automotive, beverages and pharma advertisers. 

Despite worrying signs in the Chinese economy, total APAC advertising growth will be higher in 2024 than 2023 at 4.2% (compared to 3.7%). This is due to further digital advertising growth, which will account for 80% of the Chinese advertising market this year. 

Spend levels in India will continue to grow, albeit less impressively than in 2023, at 6.8%. Japan will remain flat at 3.1% (but with an 8% rise in digital advertising budgets), while Australia will return to growth after a spend decline in 2023 with a 1.8% rise in spend. 

EMEA looks set to deliver stronger ad growth than expected, in part due to advertiser demand around the Euro 2024 football tournament in Germany during June and July, and the Summer Olympics in Paris. Among the large markets in the region, the UK is expected to show the highest growth at 6%, an increase driven by the increased digitalisation of advertising - digital spend in the market will reach three-quarters of total spending. 

Meanwhile, France is forecast to beat previous expectations to post 4% growth and Germany 3.4%, a significant jump from 2023, due in part to the sports events in each country and driven by spend increases in digital, connected TV and retail media. 

Long-term positivity 

On a macro level, advertising’s optimistic mood is forecast to continue for the foreseeable future, with average annual spend growth of 4.5% over the next three years, above inflation and GDP predictions. 

This optimism that the ad market will see sustained growth reflects evolving audience behaviour, believes Swayne. “From a consumer standpoint, 85% of people’s day is spent in media. The amount of time people spend in front of a screen or in an experience is  ever-increasing. As a result, so are opportunities for brands and businesses to meaningfully reach them, and that’s what the experts in our media agencies Carat, dentsu X and iProspect spend each day pursuing.” 

The opportunity ahead

With digital opportunities growing, marketers and advertisers that focus on three key specific areas of innovation will have a clear advantage over competitors

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To find out more on the global ad spend forecasts and the outlook for the advertising industry, visit dentsu.