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Media owners advertising revenues will reach $842 billion this year, report
The summer update of MAGNA’s “Global Ad Forecast” predicts media owners advertising revenues will reach $842 billion this year, a 4.6% growth compared to $805 billion in 2022.
MAGNA’s analysis of the financial reports of the world’s largest media owners confirm that the level of concentration in the supply side remains high, but the market is more competitive than one or two years ago, thanks to the emergence of challengers in various segments and regions.
The three largest media owners in 2022 (Google, Meta, and Alibaba) captured 47% of global ad spend (across all media and all markets) down from 49% in 2021. That’s because the growth of the top three slowed down to just +4% in 2022 while challengers grew much faster than the Big Three last year in both the Western world (Amazon +21%, Apple +37%) and China (Bytedance/Tiktok +40%, Pinduoduo +42%).
The 20 largest advertising vendors combined captured 72% of the global advertising dollars, which means every other media owner outside the top 20 shared 28% of the world’s advertising spending, compared to 27% in 2021. It’s too early to be sure whether the trend towards globalization and concentration in digital advertising is pausing temporarily, after the tremendous COVID-induced acceleration, or if the market will continue to become more competitive. The first quarter of 2023 suggests the rebalancing continues, with underwhelming growth from the largest vendors and expansion of “small giants”.
Other key finding: the top 20 lists of advertising vendors now includes four ecommerce companies (Alibaba, Amazon, JD.com, Pinduoduo), ten digital media companies (Google, Meta, Apple, Microsoft, Bytedance, Tencent, Baidu, Kuaishou, Twitter, Snap) and just six traditional media companies (Comcast NBCU, Disney, Paramount, Warner Discovery, Fox, and RTL).
Traditional media companies and branding formats (Television, Audio, Publishing, OOH, Cinema) are most exposed in this uncertain business climate, as some brands reduce marketing budget or prioritize performance-based digital ad formats. Global ad revenues across traditional categories in aggregate will thus shrink by -3% to $264 billion.
Global television advertising revenues will shrink by -5% this year to $159 billion while Publishing ad sales will drop -4% to $44bn. Audio Media ad revenues will be stable (-0.5% to $28bn). The only traditional media categories to grow will be Out-of-Home, up +5% to reach $31 billion (catching up with pre-COVID market size), cinema (up 23% to $2 billion).
Vincent Létang, EVP, Global Market Research, MAGNA, and author of the report: Advertising spending slowed down to a halt in the first quarter of 2023 (+1.5% globally, flat in most Western markets) due to economic uncertainty and the lack of cyclical drivers. There are, however, some drivers mitigating the impact of economic slowdown: Ecommerce and Retail Media bringing more marketing dollars into digital advertising formats, and the counter-cyclical dynamic of some large industry verticals (Retail, Auto, Travel).
