The latest edition of GroupM’s mid-year predictions show that although the global growth forecast for 2023 remains relatively unchanged, some shifting has taken place in individual markets since the December forecast.

Global advertising growth this year (minus U.S. political ads) is expected to increase by 5.9% to $874.5 billion USD, moving up to 6% growth in 2024. GroupM is looking for the trend of normalization to continue to play out in the second half of this year and in 2024. One reason for normalization is that the IMF (International Monetary Fund) foresees global inflation to slow to 7.0%.

Canada is one of the markets where the forecast has shifted. In December, Canada was projected to grow by 8% this year, but that number has now that number has been downgraded to 5% revenue growth due to the macroeconomic environment. That growth equates to a total of $26.5 million this year. The projections for 2024 and 2025 are $28.7 million and $30.7 million, respectively.

GroupM’s forecast for Canada is overall more optimistic than Dentsu’s – which predicted 2.2% growth this year – the downgrade is a major difference, as Dentsu revised its outlook to be higher after a better-than-expected start to 2023.

On the global level, GroupM predicts that AI is likely to touch at least half of all advertising revenue in some way by the end of this year and inform more than two-thirds of all advertising by 2028. 

Looking at media channels, retail media is the third-fastest growing in 2023, behind digital OOH and connected TV, although those channels remain a fraction of the size. Retail media, now defined as including ad revenue from last mile delivery services, will grow 9.9% to reach $125.7 billion USD in 2023, and is forecast to exceed TV revenue (including connected TV) in 2028. The top 25 ad sellers globally, led by Comcast, account for 75.3% of total ad revenue. Five of the top 25 are retail media ad sellers.

Digital advertising is forecast to grow 8.4% in 2023 and reach 74.4% of total global ad revenue by 2028. That said, there has been a noticeable deceleration in growth from the 32% recorded in 2021, with 2022 coming in at 9.2% and 8.4% expected in 2023, in line with the December prediction. These growth numbers are the slowest since 2009 when digital growth was just 3.6%. The report says this deceleration should be thought of more as a function of the size and maturity of digital rather than a recessionary environment. With digital now more than two-thirds of total advertising, digital growth at historic double-digit rates has become difficult to sustain, and it is expected to decelerate and normalize further over the next five years. 

Traditional TV revenue is forecast to decline 1.2%, excluding U.S. political advertising. By comparison, connected TV revenue in 2023 is estimated at $25.9 billion USD, an increase of 13.2% over 2022 revenue of $22.9 billion USD. The global CAGR for connected TV through 2028 currently stands at 10.4% with expected revenue of $42.5 billion USD in 2028. Consumer spending on subscription video on demand (SVOD) represents between just one-fifth and one-third of total video spending in major markets, leaving plenty of room for streaming providers to grow subscriptions.

Global audio, including digital extensions, is expected to decline 0.3% this year and remain flat over the next five years. Audio is not forecast to regain pre-pandemic revenue, despite the continued growth of digital audio, which is estimated to increase revenue 10.9% in 2023, reaching $9.9 billion USD in 2028 – a five-year CAGR of 6.9%. Digital extensions of audio, including digital formats at traditional radio stations and digital platforms such as Spotify, continue to increase their share of revenue. Digital is projected to represent 36.5% of total audio by 2028. 

The decline of print, including both newspapers and magazines, continues despite the growth of digital extensions, which will make up half of total print revenue in 2028. Last year, print declined 2.9% compared 2021, when there was uncharacteristic growth. This year print is expected to decline a further 4.8%. Magazines are experiencing steeper declines, representing just over a third of total print revenue. 

Global out-of-home (OOH) has surpassed 2019 revenue levels one year earlier than predicted in the December 2022 forecast by a scant $11.8 million USD. Growth in 2023, including both traditional and digital OOH, is forecast at 12.7%. Global OOH growth is estimated to be 7.5% this year and expected to continue to grow through 2028. Digital OOH, taken separately, is forecast to grow 26.1% in 2023 to $13.3 billion.