Dentsu's 2022 N.A. Ad Spend Forecast: +8.1% with Upside Potential

However dentsu39s Mike Law sees the current conditions as a glass half full and he believes it39s filling even more Law who is US President of dentsu39s Amplifi noted that several industries including travel and entertainment have returned to spending after nearly disappearing during the worst of the pandemic And he said dentsu39s June forecast is still on targetThe report predicts that global advertising growth will rise 104 this year to 634 billion North America growth is expected to increase 137 in 2021 and 81 in 2022 Out of home OOH and cinema were the hardest hit media sectors during the pandemic but they are now positioned for the fastest growth with cinema advertising predicted to increase 351 and OOH up 146 this yearquotWe have recently been looking at the forecasts and we39re actually looking to up themquot said Law quotThe acceleration of digital spend and in particular search and social is very strong We39re seeing OOH rebound faster than we had initially thought and local TV is strongquot Law noted that while national TV ad spend is down due to ratings attrition sports ratings are trending up helping to buoy the national TV sectorHe credits the return of fantasy sports and live events in stadiums and arenas as large reasons why sports ratings are up quotLast year there was a drop in fantasy sports players given uncertainties around player health and whether teams would last a full seasonquot he recalled quotThis year that concern is gone and the fantasy sports players are back and reenergized driving them to view more games on TVquotLaw noted that the automotive category has been impacted by the semiconductor shortage crimping manufacturer production However he expects that while there is some decrease in national media spend short term it won39t be draconian The limited supply is going to force consumers to consider new auto brands And auto brands in turn will be forced to win customers back in the next two to three years as the supply crunch easesquotLong term you39re going to see that rebound but even today the brands are saying 39It39s still important for us to have a message in the market39quot Law said This is especially important as the competition in the allelectric vehicle category grows over the next few yearsOther categories are adapting as well among them quick service and casual dining restaurants quotThey are managing messaging based on various supply chain issuesquot Law explained quotThey may decide on a weektoweek dynamic to focus on a chicken message versus a beef message depending on supply levels at the time We39ve seen more of a portfoliomanagement approach more than taking any money out of the marketplacequotThen there39s cinema advertising According to the Box Office Mojo the thirdquarter 2021 box office39s cumulative gross was 136 billion up 1002 from the same quarter in 2020 However that still only represents 49 of what it was in 2019 prepandemic quotCinema is back on the radarquot Law said quotIt has been resized to what it is but the value in terms of audience remains It39s a noncluttered environment and a huge screen And we know screensize matters to ad effectiveness It39s still a great ad experiencequotOne area that dentsu will be closely watching is streaming video The company has made a significant shift in dollars in particular in the fourth quarter away from linear to alternatives like advertising supported on demand over the top and other streaming video options But that doesn39t necessarily mean that the shifts can39t be modified going forwardLaw noted that clients realize they can reach the same number of people in a hybrid world but the impact of connected TV is not as strong as the impact of linear quotOn the other handquot he continued quotlook at the number of brands that have done so well only using connected TV Some of them never bought national TV They were Facebookonly and they said 39Next step is connected TV39quotWe know the performance for those brands is strong but for some reason the response rate and the volume for some categories is not as highquot Law said quotIt may be time for us to look at our media models and update them as the weak metrics do not make sense intuitively given the great targeting and relative lack of clutter in connected TV versus traditional linearquotOverall there is nothing in the dentsu forecast that Law thinks will dramatically change in the current year The glass may be filled with different and everchanging factors but for now heamp160is optimistic and sees media investment strong through the foreseeable futureClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillagecomMyersBizNet

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Dentsu's 2022 N.A. Ad Spend Forecast: +8.1% with Upside Potential

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Jeff Minsky

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Dentsu's 2022 N.A. Ad Spend Forecast: +8.1% with Upside Potential

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