dentsu international

While global GDP is expected to grow in 2022, the evolving pandemic situation and ongoing supply logistics issues are contributing to a climate of uncertainty. Against this background, media is experiencing a profound transformation, with a fragmentation of viewership underpinned by the continuing downward trend in Linear Television viewing. 

Insight #1 

With a projected 9.2% global growth in ad spend in 2022, the advertising market is expected to exceed pre-pandemic levels by $117.2B. 

The positive momentum from 2021 will continue into Q1 2022, with growth on a like-for-like basis by 8.9% boosted by the Winter Olympics & Paralympics Beijing 2022. The strong demand and the limited supply of TV audiences has led to price inflation. Linear Television ad spend is forecast to grow by 3.8% in 2022 to reach US$197.8 billion, however share is declining with focus growing on Connected TV and Video on Demand (VOD). However, the rise of on-demand consumption does not mean the end of live, communal viewing experiences in 2022. In addition to the Winter Olympics in Beijing coming up in February this year will also feature the FIFA World Cup in Qatar in November-December (a first in this season), which typically commands massive TV audiences. 

CMO Perspective: 

The best way to respond to viewer erosion for Linear Television viewer and its fueling aggressive inflation is to use Linear Television more strategically. Advertisers will need to have additional flexibility to fragment their budgets to maximize the big screen opportunities coming to market. 

Insight #2 

Digital ad spend is forecast to reach US $408.4 billion in 2022 accounting for a 55.5% share of global ad spend. This is predicted to increase to 59.4% by 2024. 

Social (21.4% YOY growth), Video (18.9% YOY growth), and Search (16.9% YOY growth) are predicted to lead digital growth. Advertisers have increased focus and resources into ecommerce, increasing display and search budgets on retailer web sites in reaction to new consumption habits. Following 30.9% growth in 2021, Search spend is forecast to grow by 16.9% in 2022 to US$144.9 billion. We also expect to see a substantial adoption of connected commerce, with brands using social platforms to transact without leaving the app. Social spend is predicted to grow by 21.4% in 2022. 

CMO Perspective: 

Live video shopping will likely further grow globally which also supports the increased relevance of influencer marketing playing a significant role in consumer behavior among younger age groups. The growing importance of gaming and virtual worlds is another key trend to consider both in terms of the in-game advertising opportunity and in terms of contextual activations that aim to integrate brands within gaming culture. 

Insight #3 

Overall, the U.S. ad market in 2022 is forecast to increase by 14% to reach US$291 billion and will continue to see the growth that we have seen in 2021. 

The U.S. ad market recovered to above pre-pandemic levels in 2021, up 12% (US$27 billion) versus 2019. As the population has started to live with COVID-19, all areas of the country are opening, including malls, cinemas, and travel destinations. There are concerns about supply issues, especially the computer chip shortage that will continue into 2022 for Automotive as well as CPG and Electronics - the impact on small businesses will be heavily felt. With the new COVID-19 variant, we are watching Travel brands closely and will stay close to categories that could be affected by these issues. Digital at a 54% share continues to grow rapidly by 25.4% in 2022. Local spot TV is returning to pre-pandemic levels. Political advertising spend will be extremely strong for 2022 due to the midterm elections, with an estimated US$5.9 billion in spend. 

CMO Perspective: 

Flexibility will be key as the shift to digital enabled media continues. Emerging channels like gaming are providing an environment for experimentation and a test-bed for brands aiming to garner insights on how consumer attention will be earned with the emergence of the Metaverse. 

Insight #4 

In Canada, ad spend is forecast to grow by 10.9% in 2022 based on momentum in the second half of 2021. 

While 2021 had started with uncertainty due to the extended lockdowns and experienced recovery in the second half of the year, in 2022 Canada expects more stability in growth with the reopening of all markets and with no significant return to lockdowns or other COVID-19 measures expected. Trends in this market include the growth of Connected TV, which is expected to accelerate in response to the challenges of the Linear Television marketplace – declining ratings, increased inflation rates and demand – with the emergence of new and growing categories (e.g., food delivery) and the return of travel spend. Retail media including e-commerce is predicted to continue an upward trajectory. These growth trends are expected to continue with the Canadian ad market predicted to grow by 6.3% in 2023 and 6.5% in 2024. 

CMO Perspective: 

Connected TV is becoming shoppable. YouTube has introduced technology that will allow viewers to send links from ads to their phones and other broadcasters and retailers are working on solutions in this vein. Shoppable media is becoming ubiquitous. 

Insight #5 

Beverages, Retail and Cosmetics & Personal Care are the industry sectors expected to experience the most significant ad spend growth. 

All industries tracked in our report will see ad spend grow in 2022. Even the three industries hit the hardest in 2020 (Travel & Transport, Automotive and Media & Entertainment) will experience ad spend growth at rates at least equal to 8% in 2022. The Media & Entertainment sector rebounded with 20.1% growth in 2021 with the easing of restrictions and the growth is forecast to continue this year at 8.8%. The in-home entertainment category has, however, been a driver of growth in the sector fueled by VOD TV streaming services such as Amazon Prime and Disney+ as people at home with limited leisure options search for entertainment. Automotive is the sector where ad spend is expected to grow the least in 2022 (7.6%), with component supply issues impacting car production and new car launches. 

CMO Perspective: 

In the years ahead, ad spending will be an important reflection not just of economic confidence and innovation, but the speed and scale of adoption of more sustainable behaviors. 2022 will be the year when brand communications on environmental ambitions need to turn into clear plans and action – pledges need clear plans and progress reporting if brand loyalty and trust is not to be undermined. 

Learn more 

Download the full dentsu Global Ad Spend Report – January 2022 here.