A downturn in ad spending in central Europe stemming from war-related disruption in Ukraine and Russia will temper overall advertising outlays in 2022, according to Zenith Media Services Inc.'s midyear "Advertising Expenditure Forecast."
Publicis Groupe SA-owned Zenith estimates global ad spending will grow 8% to $781 billion this year. That projection represents a downward revision from its 2021 year-end growth forecast of 9%.
A severe disruption in Russia and its closest trading partners after the invasion of Ukraine will result in a 26% decline in ad spending in central and Eastern Europe, despite gains in most other markets in the region, according to Zenith.
The midyear report also lowered Zenith's Latin America projection for 2022 to 8% from 9% and raised the Asia-Pacific projection to 7% from 6%. Growth forecasts for North America, the Middle East and North Africa, and Western Europe remain unchanged at 12%, 7% and 6%, respectively.
Driving the expected advertising advances this year will be spending on the U.S. midterm elections, the Winter Olympics and the FIFA World Cup.
Almost 57% of the new ad spending this year, or $33 billion, will come from the U.S. The next-largest share of new spending will come from China, contributing 9.1%, followed by Japan (6.2%) and the U.K. (5.8%).
Spending against linear television is projected to grow 1.1% a year on average between 2021 and 2024, with prices rising as marketers look to reach mass audiences. TV's share of total ad spending is expected to decline to 20.8% in 2024 from 24.6% in 2021, while online video's share expands to 11.1% from 8.8% over the same period.
Online video is predicted to be the fastest-growing advertising channel over the next three years, overtaking social media. Zenith forecasts online video ad spending will grow 15.4% a year on average between 2021 and 2024, driven by the rapid development of connected TV, ad-supported video on demand, streaming and other video formats.
Zenith expects online video ad spending will expand to $95 billion in 2024 from $62 billion in 2021.
Social media is projected to see an average growth rate of 15.1% per year between 2021 and 2024. This year, spending on social media advertising is expected to reach $187 million, accounting for 25% of expenditures across all media.
"Online video is growing by creating new opportunities for building brand awareness, complemented by social media's capacity for cost-effective targeting with low barriers to entry," Jonathan Barnard, Zenith head of forecasting, said in a statement. "Online video is steadily narrowing the spending gap with television, and will be half as large as television by 2024."
Still recovering from the deleterious impact of the pandemic, cinema and out-of-home will average 11.9% and 8.0% growth between 2021 and 2024, respectively. Allocations against cinema are expected to reach $3.9 billion in 2024, short of its pre-pandemic level of $4.8 billion in 2019. Conversely, out-of-home ad spending is forecast to be $45 billion in 2024, exceeding the pre-pandemic level of $42.3 billion in 2019.