NEW YORK—Earlier this month, the media agency Zenith (a unit of advertising giant Publicis Media) issued a mid-year update for the advertising business, which indicated a revised downward 2022 global outlook but a boost in its 2024 projection. Characterizing it as a “minor downgrade,” Zenith reduced its 2022 worldwide ad spending forecast down 1.1 percentage points to 8.0 percent from the 9.1 percent growth it had forecasted in December 2021.

Zenith's 2023 global ad growth estimate was revised down 0.3 points to 5.4 percent, and its 2024 projection was revised up 0.2 points to 7.6 percent.

Nonetheless, the advertising market in North America remains on track with previous projections, Zenith said.

Zenith’s forecasts for North America, MENA and Western Europe this year are unchanged at 12 percent, 7 percent and 6 percent growth, respectively. Severe disruption in Russia and its closest trading partners after the invasion of Ukraine will lead to a 26 percent decline in ad spend in Central & Eastern Europe, even though most other markets in the region will continue to grow, Zenith said in its revised forecast. 

“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,” Zenith said. “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 percent to 13 percent this year. Online video prices are expected to increase by about 7 percent, although in this case the supply of audiences is rising.”

The agency also noted that online video is now predicted to be the fastest-growing channel over the next three years: Zenith forecasts it will grow 15.4 percent 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.

In addition, 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 percent 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 percent in 2019, reaching 85 percent in 2021 as TikTok, Snapchat, LinkedIn and Pinterest gained market share, the agency noted.