Marketing

Media agencies have trimmed their growth forecasts, but still expect the advertising industry to grow this year

Concerns over a recession are impacting marketing spend.
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Francis Scialabba

· less than 3 min read

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It’s not great to see headlines about a recession. Last week, Insider reported that Microsoft has pressed pause on TV advertising. According to the pub, “One person with direct knowledge said Microsoft made the advertising cuts in the face of rising interest rates and supply-chain challenges to avoid layoffs.”

Big picture: Publicis’s Zenith corrected its global ad-spending forecast last week, lowering expected growth for 2022 from 9.1% to 8%—totaling about $781 billion—citing the war in Ukraine. Even so, it said, “ad spend has remained on track despite the macroeconomic headwinds that emerged this year.”

GroupM, which revised its annual forecast today, adjusted from 9.7% to 8.4% (not including political ads in the US).

As one advertiser put it, “Not great, Bob!”

Stay calm: Media agencies aren’t waving red flags yet. Looking at GroupM’s report, global television advertising is expected to grow 4% this year, digital advertising will grow 12%, and out-of-home will grow 12%.

“Although the overall economy and environment is incrementally more negative now than it was back in December, I think that—broadly speaking—people in our industry, and many pundits, much that’s in the press, is overly negative relative to the reality of how the overall economy is faring,” Brian Wieser, global president of business intelligence at GroupM, said during a briefing last week.

And if things do get bad, marketers will figure it out when the time comes. At least that’s what Digiday found when asking advertising execs about ad spend amid recession fears. “I think people are too afraid of missing revenue targets to pull back…Lots of people want to believe they can be the outlier in a macro downturn,” one exec said.

+1: The top five sellers of advertising in 2021 were Google, Meta, Alibaba, Bytedance, and Amazon, generating $408 billion in advertising revenue, about 53% of the global total, according to GroupM.—RB

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