MAM
Global ad expenditure to grow 8% in 2022: Zenith’s Report
Mumbai: Global advertising expenditure is expected to grow 8 per cent in 2022, according to Zenith’s latest Advertising Expenditure Forecasts report, which was released on Wednesday. This represents a minor downgrade from a little over 9 per cent growth rate provided by Zenith in December 2021.
The Winter Olympics, the mid-term US elections, and the soccer World Cup, which will be held for the first time in the most advertising-intensive period of the year, the run-up to Christmas, will all help to boost growth. Faced with this difficult comparison, the growth will slow down to 5.4 per cent in 2023, before the Summer Olympics and US presidential elections help boost it to 7.6 per cent in 2024.
Zenith’s forecasts for North America, MENA and Western Europe this year are unchanged at 12 per cent, 7 per cent and 6 per cent growth respectively. Latin America was downgraded slightly from 9 per cent to 8 per cent, but the Asia Pacific was upgraded from 6 per cent to 7 per cent, thanks to a very strong performance from India.
Severe disruption in Russia and its closest trading partners after the invasion of Ukraine will lead to a 26 per cent decline in ad spend in Central & Eastern Europe, even though most other markets in the region will continue to grow.
Ad spend has remained on track despite the macroeconomic headwinds that emerged this year. High inflation, concentrated in essentials like heating, petrol, and food, is forcing consumers to reprioritise their spending, particularly the less well-off, and has led to a drop in consumer confidence.
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, corporate investment is rising, and there is little evidence of widespread cost-cutting.
India to lead growth with 21 per cent expansion this year
Global ad spend is expected to increase by $58 billion in 2022, rising to $781 billion from $723 billion in 2021. Most of the new ad dollars will come from the US, which is forecast to expand by $33 billion in 2022, driven by continued, rapid digital transformation, accounting for 57 per cent of all the money added to the ad market this year.
China, Japan, and the UK come next, supplying 9.1 per cent, 6.2 per cent, and 5.8 per cent of new ad dollars, respectively. India is in fifth place, accounting for 4.6 per cent of the growth in ad spend this year, even though it is only the 12th largest ad market. India will be the fastest-growing market in percentage terms, expanding by 20.8 per cent, driven by election advertising and the resumption of festivals that were cancelled at the height of the pandemic.
Zenith India chief executive officer Jai Lala said, “India continues to have a robust adex growth on the back of digital and TV. Key categories continue to be led by FMCG and the new app-based clients in the area of fintech, edutech, food tech amongst others.”
Higher prices in traditional channels accelerate shift to digital alternatives
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. Price rises vary widely for different audiences in different countries, but the global average cost of television advertising across all audiences is expected to rise by 11 per cent-13 per cent this year.
Online video prices are expected to increase by about 7 per cent, although in this case the supply of audiences is rising. Other digital channels where supply is climbing and volumes are flexible are inflating only modestly, with three per cent average price rises forecast for social media and other digital displays.
Out-of-home and radio prices will go up about four per cent this year, while print prices will remain stable, because demand for advertising in printed publications is falling as rapidly as readership.
Brands that simply buy broad audiences to reach targets will not be able to avoid having to spend more to reach the same audiences. But brands that use first-party data to identify their most profitable customers, and combine it with third-party data to target their best prospects in the most efficient channels, will be able to mitigate much of the effect of media inflation.
The huge and growing volume of digital content consumption is making it more effective for brands to scale by aggregating digital audiences. Zenith predicts 62 per cent of ad budgets will be spent on digital media in 2022, up from 59 per cent in 2021, and that this proportion will reach 65 per cent in 2024.
Zenith Global Chief Strategy Officer Ben Lukawski said, “In a world where trading is becoming dominated by auctions, competitive advantage is achieved not by scale, but by data.”
“Inflation will hit cheap reach buyers hard, but brands that make smart use of their data will manage costs and grow their business at the same time,” he added.
Online video overtakes social media as the fastest-growing channel
Online video is now predicted to be the fastest-growing channel over the next three years: Zenith forecasts it will grow 15.4 per cent a year on average between 2021 and 2024, driven by the rapid development of connected TV, ad-funded video-on-demand, streaming and other video formats.
Connected TV is now a mainstream video platform in the US, with a higher penetration than cable TV, and is becoming established in other markets, especially in Western Europe and 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. Zenith expects online video ad spend to rise from $62 billion in 2021 to $95 billion in 2024.
Online video will overtake social media, the fastest-growing channel for the previous nine years. Social media ad spend (which includes video ads in social media feeds) is still forecast to grow at an average rate of 15.1 per cent a year between 2021 and 2024, propelled by rising competition among platforms that is driving continued innovation on formats and closer integration with commerce.
Meta’s share of social media ad spend outside China has been falling steadily since it peaked at 89 per cent in 2019, reaching 85 per cent in 2021 as TikTok, Snapchat, LinkedIn and Pinterest gained market share. Zenith forecasts social media ad spend will rise from $153 billion in 2021 to $187 billion in 2022, when it will account for 25 per cent of expenditure on advertising across all media.
Cinema and out-of-home will take third and fourth place among the fastest-growing media, averaging 11.9 per cent and 8 per cent annual growth between 2021 and 2024, respectively.
These are still recovering from the deep losses they suffered in 2020 and 2021 when cinemas were closed, and consumers were confined indoors. Cinema and out-of-home have a lot of ground to make up, however, and are taking their time to do so. Many brands that were forced to find alternatives, often digital, have found them effective, and see little need to shift their budgets back again.
Zenith expects cinema ad spend to reach $3.9 billion in 2024, well below its pre-pandemic level of $4.8 billion in 2019, while out-of-home will reach $45.0 billion in 2024, exceeding the $42.3 billion it achieved in 2019 for the first time.
Linear television advertising will grow by 1.1 per cent a year on average between 2021 and 2024, from $173.6 billion to $179.2 billion, as price rises continue to compensate for loss of audiences. This ongoing decline in reach and efficiency will drive brands to digital channels, however, including online video. Television’s share of total ad spend is forecast to fall from 24.6 per cent in 2021 to 20.8 per cent in 2024, while online video’s share increases from 8.8 per cent to 11.1 per cent.
“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 Zenith Head of Forecasting Jonathan Barnard. “Online video is steadily narrowing the spending gap with television, and will be half as large as television by 2024.”
MAM
Stagwell expands Trade Desk tie up to deploy Koa Agents globally
AI agents to automate planning buying optimisation and measurement.
MUMBAI: Media buying may soon need fewer hands on keyboards and more prompts on screens. Stagwell has expanded its global partnership with The Trade Desk, becoming the first global marketing network to adopt Koa Agents, an alpha-stage, agentic AI system designed to overhaul how digital advertising campaigns are run.
At its core, Koa Agents flips the traditional workflow. Instead of manually configuring campaigns step by step, marketers can simply describe their objectives, with AI agents executing, optimising and refining campaigns in real time. Tasks that once took days from audience segmentation to performance analysis are now automated and continuously adjusted as conditions shift.
The integration will connect Koa Agents with Stagwell’s proprietary media ecosystem through The Trade Desk’s Open Agentic Kit, effectively stitching together planning, activation, measurement and optimisation into a single, automated loop.
The first phase of deployment will focus on two key areas. For audience planning, traders can define target segments while Koa Agents identify high-value consumers, activate campaigns across premium inventory and optimise performance dynamically. On the supply side, the system introduces deeper transparency, using quality signals such as ad-to-content ratios and refresh rates to prioritise inventory, while offering clearer visibility into pricing and margins during live campaigns.
The rollout will also introduce a conversational interface, allowing traders to query campaign performance in plain language, why it is underperforming, what is driving results, and what to change receiving real-time, actionable recommendations.
Stagwell plans to make these capabilities available to select clients in a closed beta later this summer, with a broader roadmap aimed at automating the full campaign lifecycle, including setup, troubleshooting and predictive optimisation.
The move builds on an existing partnership between the two companies, including Stagwell’s adoption of Unified ID 2.0, The Trade Desk’s privacy-focused identity framework. Combined with Koa Agents, this is expected to sharpen audience targeting, streamline cross-channel activation and improve measurement accuracy.
As advertising grows more complex behind the scenes, both companies are betting that the front end can become radically simpler where campaigns are less about clicks and controls, and more about outcomes and intent.
