Friday, June 24, 2022
Home / Profiles / Television, Online Video Show Resilience in Ad Market

Television, Online Video Show Resilience in Ad Market


Zenith’s latest Advertising Expenditure Forecasts report details its predictions for global adspend from 2022 through 2024.

Supply chain issues, cost of living increases and volatile stock markets have slightly dimmed adspend projections for this year, but not by much. According to Zenith’s report, global advertising expenditure is poised to grow 8 percent in 2022—down from the 9.1 percent growth rate the group projected at the end of last year. “High inflation, concentrated in essentials like heating, petrol and food, is forcing consumers to reprioritize their spending, particularly the less well-off, and has led to a drop in consumer confidence,” the forecast notes. “But for now, consumer spending continues to grow, as consumers demonstrate their strong appetite for the travel and entertainment experiences that were denied to them over the pandemic. Business confidence is generally high and corporate investment is rising, and there is little evidence of widespread cost-cutting.”

What else is helping this year? Major events, notably the Winter Olympics, the upcoming midterm elections in the U.S. and the World Cup, will boost marketers’ spend this year, Zenith notes. Indeed, the much-anticipated football tournament will take place in the most advertising-intensive period of the year in the run-up to Christmas. Prospects for 2023 are less upbeat, with growth slowing to 5.4 percent before rebounding to 7.6 percent in 2024, thanks to the Summer Olympics and the American presidential election.

Zenith estimates adspend this year will climb to $781 billion, with money continuing to shift to digital: this year, 62 percent of budgets will be on digital media, up from 59 percent last year and rising to 65 percent in 2024. The company also noted that prices are rising. The cost of TV advertising is on track to rise between 11 percent and 13 percent this year, while online video prices will be up 7 percent. “The sustained growth in demand from advertisers is pushing up media inflation, particularly in television, where the supply of audiences is falling steadily as viewers switch to alternatives,” the forecast observes.

Zenith also notes that online video is expected to be the fastest-growing channel over the next three years, growing by an average of 15.4 percent annually through 2024, thanks to connected TVs and AVOD services. Online video advertising should hit $95 billion in 2024. “Connected TV is now a mainstream video platform in the U.S., with a higher penetration than cable TV, and is becoming established in other markets, especially in Western Europe and the Asia Pacific. The introduction of cheaper ad-funded tiers by SVOD services like Netflix and Disney+ will boost growth further by providing new high-quality environments for brand communication. Mixed video-on-demand models that combine subscriptions with advertising will also help online video audiences continue to grow across the world by recruiting consumers unwilling or unable to afford the growing roster of subscription-only services.”

Linear TV will still pull in almost $180 billion in 2024, Zenith notes, as price increases compensate for the loss in audiences. But TV’s percentage of adspend will continue to slip, dropping to just under 21 percent in 2024, with online video rising to 11.1 percent. “Online video is growing by creating new opportunities for building brand awareness, complemented by social media’s capacity for cost-effective targeting with low barriers to entry,” said Jonathan Barnard, head of forecasting at Zenith. “Online video is steadily narrowing the spending gap with television and will be half as large as television by 2024.”











About Mansha Daswani

Mansha Daswani is the editor and associate publisher of World Screen. She can be reached on mdaswani@worldscreen.com.

ALSO READ

Conecta FICTION & ENTERTAINMENT Concludes Sixth Edition

The sixth edition of Conecta FICTION & ENTERTAINMENT has wrapped in Toledo, Spain, where industry professionals gathered for four days with the aim of promoting co-productions between America and Europe.