GroupM revised it's global ad spending growth estimate downward for the second time this year, but still remains bullish on the underlying strength of the worldwide ad economy, citing healthy fundamentals in the U.S. economy, new business creation and expanding new pockets of ad spending, especially retail media.
GroupM now estimates the global ad market will expand expand 6.5% this year, nearly half the 11% expansion it originally projected in its year-end forecast a year ago.
GroupM's bullishness extends into 2023, which despite being an off-cycle year with no significant incremental ad spending events such as the Olympics, or U.S. elections, will grow an estimated 5.9%.
While the U.S. continues to be expanding at a faster rate than the global average, GroupM slashed its estimate for 2022 growth to just 7.1% in 2022 from 12.8% at its mid-year update in June.
GroupM now projects the U.S. ad economy will expand 5.5% in 2023, lagging the global rate of expansion next year.
During a preview of GroupM’s forecast with members of the press, Global Director of Business Intelligence Kate Scott-Dawkins characterized the downward revisions as more of a “deceleration” from the “outsized” growth rates in 2021, which compared with 2020’s COVID-19 lockdowns and a mini ad recession.
Scott-Dawkins also described the near and long-term forecast to be more of a “normalization” of the ad economy’s expansion, projecting “mid- to single-digit growth heading into the next five years.”
“I think that’s a real theme as we go into the end of the year, which is that normalization,” she said.