India is the fastest growing market globally at 14.6%: Dentsu ad spend report

Advertising investment is forecast to grow by 9.2% globally in 2022, according to the latest dentsu Global Ad Spend Forecast report. The twice-yearly report which combines data from over 50 markets globally, anticipates 745 billion will be spent globally.

Ad spend in Asia Pacific is expected to grow by 5.9%, with digital forecast to increase 9.6% to a share of 61.1% of total APAC advertising spend.

Moving towards a second consecutive year of growth following the 5.0% market dip in 2020, 2022 is projected to build on a stronger than expected recovery in 2021 which itself saw a record-high 14.4% growth in APAC, totalling $241 billion.

When compared to previous global financial and advertising crisis, notably the financial crash of 2008, this rebound is almost three times greater: in 2022, the growth forecast at 9.2% is nearly three times the 3.4% growth in 2011 – second year post global financial crisis. In 2022, the global ad market exceeds the 2019 pre-pandemic level of spend by 18.7%, whereas in 2011, the global ad market continued to be 1.0% lower than in 2008.

In APAC, overall ad spend growth is boosted by key sporting events such as Indian Premier League, FIFA World Cup, Winter Olympics, and country elections in Australia and India. Digital and television continue to be the two powerhouses driving global and APAC ad spends, yet with opposite dynamics. Following a 24.8% increase in 2021 (vs 29.1% globally), dentsu forecasts digital investment to grow by 9.6% (vs 14.8% globally) in 2022, fuelled by Social and Programmatic in APAC. This will result in the digital share of spend increasing to 61.1% ($150 billion) of the total ad spend in APAC, over twice as big as the television share of spend (24.5%) in 2022.

India – Fastest growing market

The easing of lockdown restrictions amid the drop in the number of COVID-19 infections and the ongoing vaccination drive in the country has helped the economy gain momentum. Following 18.6% year-on-year growth in 2021, the world’s tenth largest ad market recovered and will exceed 2019 pre-pandemic levels in 2022 by 18%, US$1.7 billion led by Linear Television and Digital.

Linear Television remains the most popular and resilient media in India with a 40% share of spend.

Linear Television ad volumes continued to post healthy growth starting from H2 2021, as marketers leveraged the reach and power of TV to raise the profile of their brands. Linear Television ad spend fully recovered in 2021 and will report healthy growth of 10% in 2022. The digital industry has benefited immensely from the shift in consumer behaviour during the pandemic. Video-led platforms, whether they be over the top (OTT) or short video platforms, are seeing strong demand from advertisers. The presence of high impact properties on Digital across sports and entertainment domains will only fuel the rise in Digital ad spends further in 2022. Digital at 34% share behind Television spend is forecast to grow at the highest rate of 30% in 2022. Print media also remains popular in India on account of its low cover price and ability to deliver original and credible content to a population that has formed the habit of reading a physical newspaper. Newspapers accounting for US$2 billion and 20% share are forecast to grow by 4.5% in 2022. The advertising market is looking buoyant driven by Corporate and Retail spending and is expected to continue to grow by double digits in 2022 and 14.6% to account for US$11 billions of worldwide ad spend.

This growth trajectory is predicted to continue into 2023 and 2024 at 15% year-on-year.

Medium-wise spends

Linear TV ad spends increased by 5.1% in 2021, the highest rate since 2013. In 2022, dentsu forecasts linear TV ad spends to grow by 1.4% to reach $60 billion in APAC. Unlike digital and despite staying in high demand, dentsu is seeing linear TV share of spend on the decline – both globally and in the region – as Connected TV and Video on Demand (VOD) grow.

Out-of-Home (OOH) and cinema will both see encouraging growth in 2022, at 12.8% and 23.4%, respectively, globally (vs 2.8% and 30.0% in APAC). Radio, too, is forecast to grow, yet at a slower pace of 1.5% in APAC (vs 2.0% globally). As with previous predictions, ad spends in newspapers and magazines will continue to decline globally and in APAC.

Globally, the industries who will see growth in ad spend this year will include the beleaguered Travel sector, which is forecast to see a rise of 10.3%. There is also confidence the Automotive advertising spend will grow by 7.6% in 2022. Growth follows an 11.5% increase in 2021 and steep declines in 2020 of 15.9%. With pent up demand and a trend towards personal vehicles in how people want to travel post pandemic, there is confidence in the recovery of the Automotive sector.

Looking further ahead, APAC ad spend is predicted to grow by 5.6% (vs 4.6% globally) in 2023 and 4.9% (vs 5.8% globally) in 2024 – exceeding growth before the pandemic (4.1% in 2019). Digital is forecast to increase its share of spend domination to 64.6% in APAC (vs 59.4% globally) in 2024. Of course, many factors contributing to the uncertain economic outlook could influence the predictions, from the evolution of the pandemic to supply chain issues, and dentsu recommend the industry keep a close eye on key economic indicators.

Key findings:

Asia Pacific advertising spend is expected to grow by 5.9% (vs global 9.2%) to reach US$255 billion (vs US$745 billion globally) in 2022 – US$33 billion above the 2019 pre-pandemic level in the region
APAC growth will be fuelled by rise of digital, now 61.1%, pacing ahead of global growth at 55.5% of overall ad spend
Recovery almost 3x faster than previous global advertising decline following 2008 financial crisis
Top five markets in 2022 continue to be the US, China, Japan, UK, Germany, whilst the fastest growing markets will be India, US, Russia, and Canada
China (17.5%) and Japan (8.2%) make up two of the top three contributors globally
India is the fastest growing market globally at 14.6%

Prerna Mehrotra, CEO Media APAC, dentsu international, commented, “APAC region is expected to post robust growth in ad spends in 2022. India, Hong Kong and Vietnam will drive double-digit growth, with rest of the region showing strong growth. The share of digital spends in APAC is set to increase to 61.1%, up from 50.1% in 2019 (pre-Covid), driven by Greater China and ANZ. TV as a platform will continue to play a key role, especially in Southeast Asia and South Asia.”

“Marketers will need to be nimble, leaning on technology and maximising opportunities in Video, Social, Connected TV and E-commerce. Use of data to drive business outcomes without compromising privacy or security will continue and we expect data collaboration to be a big focus for 2022. In light of the ongoing global turbulence and recovery, we will continue to work with brands to accelerate efforts to engage consumers and drive attentive reach,” she added.

Peter Huijboom, Global CEO Media and Global Clients, dentsu international, said, “The bounce back from the early pandemic impact continues to be strong, especially in digital. As we spend more time consuming digital media, brands have the opportunity to tap into the increased flexibility in which consumers engage through multiple touchpoints. Businesses who truly understand these developed human behaviours have the best opportunity to build lasting relationships with them.”

“The increased popularity of gaming also comes as no surprise. Dentsu launched its global gaming proposition in 2021. Along with the burgeoning Metaverse, there has never been a more exciting time for brands to experiment, innovate and engage with their customers – as all forms of media are increasingly more central to daily life and routine.”