GroupM’s mid-year forecasts predicts global 2022 ad revenue will largely match up with what it predicted in December,
The media agency network expects ad revenues to grow by 10% this year, with ad revenue in Canada is predicted to grow 9.5% and increase another 8.5% next year.
Over the next five years, Canada’s ad revenue is expected to grow by high single digits year-over-year, as are France, Germany and Brazil. Mid-single digit growth is predicted for other English-speaking markets U.S., Australia and the U.K., while China will increase at a slower rate than previously forecast – low single digits.
In 2021, Canada’s ad revenue grew by 28.8% thanks to big jumps in digital (34.5%) and TV (22.6%) spending.
Digital revenue in Canada is forecast to grow 9.7% this year, again capturing nearly three-quarters (72.8%) of the total spend. Globally, GroupM expects growth in ad revenue for pure-play digital platforms of 12% in 2022, down from last year’s 30%. Under a broader definition of digital advertising, which includes traditional media’s digital extensions, GroupM estimates the industry will account for $617 billion in 2022, or 73% of its total.
TV revenue in Canada is expected to increase another 14.0% over last year’s 22.6% jump. Globally, TV is forecast it increase 4% this year. The expectation going forward is that connected TV environments, including digital ad inventory from streaming services, will capture shares of existing budgets much more than they will drive new ones into the industry. That said, although TV remains better than many alternatives for the purposes of satisfying reach and frequency goals, its reduced effectiveness will only encourage marketers to explore alternative strategies.
OOH and cinema in Canada are predicted to continue the upward trajectory started last year, from 34.0% growth in 2021 to an additional increase of 19.5% in 2022. GroupM forecasts that the median market it’s tracking is expecting 12% growth, as many of these markets have approached or are soon to exceed their pre-pandemic highs. Outdoor to exceed its 2019 volumes next year, indicating that much of the current growth can still be characterized as recovery driven.
GroupM is not concerned about global inflation and does not expect a perilous economic state ahead, though it will have an effect on media prices.
Looking at data covering the month of April 2022 and using the dominant measures of inflation on a year-over-year basis, prices rose in the U.S by. 8.3%, while in the Euro Zone rates rose by 7.4%. In the U.K. it was 9.0%, and in Canada it was 6.8%. However, it’s not quite so severe in every major market: in China, inflation most recently ran at 2.1% while in Japan the figure was 2.5%, and in Australia it’s only 3.7%. In two other large markets, Brazil and India, inflation was high to be sure — up 12.1% and 7.8%, respectively. On a weighted average, markets tracked in the report are expected to experience inflation of 6.9% during 2022, up from 3.7% in 2021 and above levels that more typically ran in a 2% to 3% range in recent decades.
