Market Outlook for Advertising Moving Forward

Market Outlook for Advertising Moving Forward

Since becoming more consistent on LinkedIn with recent posts and thoughts, I get frequently asked about my take on the state of play in advertising and where the industry might be heading. So, here it goes.


It's no secret that the last few years have been a bit of a rollercoaster post-COVID. This is to be expected, given the unprecedented times and the backlog of projects and campaigns during that period.

After navigating through all the ups and downs of the pandemic, based on conversations I've had and the numbers I've seen, in my opinion, the ad market is gearing up for a much-needed breather. So, in short, no, I don't anticipate a COVID-like boom. But do we really need one?


The market's uncertainty led to numerous job cuts across the board over the past year. While big tech companies faced some rough patches, they typically bounce back quicker than the old-school media outlets. So I do see them as the barometer for gauging when things might pick up again.


According to recent forecasts from GroupM, the global advertising market is expected to grow by around 5% in 2024, which is a bit slower than the roughly 6% growth seen in 2023. This suggests that while the ad market is still growing overall, it's gradually slowing down. Various pieces of data I've come across whilst researching this article largely supports this overall view.

 

At the end of the day, advertising is closely tied to economic growth. The more money people have, the more they spend, which in turn drives companies to advertise more, and the cycle continues.

 

It's important to remember that we can't compare the market to the COVID boom. That was an anomaly caused by initially unimaginable circumstances. We shouldn't expect to return to that level of volume, as two years' worth of projects were essentially crammed into one.

 

So, while the ad market will continue to grow, it won't be as rapid as some might hope (sorry to be the bearer of bad news 😬). 

However, this doesn't mean that money won't be spent on advertising.

Generally, the same amount of money is spent each year in advertising, just in different areas. With that being said here’s a few predictions for next 5- 10 years:

 

- Digital ads will maintain their dominance in the market.

- Traditional media like print, radio, and TV will continue to decline.

- Emerging forms of advertising such as podcasts, influencer marketing, and social media marketing will become increasingly integral to brand advertising strategies. Brands, in my opinion will start to prioritize investing in these outlets in their advertising spend P&Ls ahead of traditional avenues.

 

So.. I don't expect to see an 'boom' across the board. Instead, I expect things to return to normal with similar or even increased spending. However, this money will not be into the same areas as before.


Digital advertising will remain at the forefront, while the ways brands engage with customers will continue to evolve, with a focus on newer media channels. Older forms of advertising will continue to diminish in relevance and eventually become a second thought.

 

The industry landscape will continue to undergo shifts, with some major players possibly facing decline or be merged within networks to cut costs and adapt to changing dynamics.

 

As I've mentioned before, the slower growth post-pandemic is prompting brands to reassess their strategies. Which has led to belt-tightening and a focus on more efficient production in-house.


Consequently, larger advertising setups may continue to decline and lose accounts. I wouldn't be surprised if, in the next decade, many major advertising agencies no longer feature prominently in the industry landscape as networks re-evaluate their costs and transform them into different entities altogether.


In conclusion, the overall spend in the market remains relatively stable over time. Everything requires advertising, everything needs content, and companies need to market and sell their products.

 

However, what will change over time is how and where that money is allocated.

Oana Nechifor

Animated North Star videos for mission driven companies

8mo

Thanks for sharing Joe Keegan. Overall it reflects the level of 'optimism' I picked around the industry, but understanding the details is really useful

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