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Thursday, June 9, 2022

Radio Ad Spend Projected To Grow Nearly 7% In 2022


 Zenith has rowed back slightly on expectations for 2022 global ad spend growth, projecting an 8% jump in expenditure – down from 9.1% growth anticipated last December.

That is the headline figure contained in the latest Advertising Expenditure Forecasts report, which singles out North America as the lynchpin of worldwide demand where ad spend growth could hit 12%.

Radio's share of total major media ad spend – which also includes internet, television, out-of-home, magazines, newspapers and cinema – is expected to be 4.6% in 2022, according to Zenith. That's good for third-most in ad spend behind internet's 67.1% and TV's 20.3%, and ahead of out-of-home's 2.9%. Looking in the crystal ball at Presidential election year 2024, radio is expected to grow another 4.6% to $15.5 billion, good for 4.3% of major media ad spend.




Major events including the Winter Olympics, the mid-term US elections and the soccer World Cup will serve to underpin spending through to Christmas. Thereafter growth will moderate to 5.4% in 2023 before picking up a head of steam in 2024 on the back of the summer Olympics and the looming US presidential election in 2024 – when growth of 7.6% is forecast.

Rampant cost inflation will further underpin growth, with television advertising witnessing double-digit cost increases of between 11-13%, helping to accelerate the shift toward digital. Online video prices are rising at a more sedate 7%, ensuring the cost-benefit equation is tilting ever more favorably in one direction.

Jonathan Barnard, head of forecasting at Zenith, said: “Online video is growing by creating new opportunities for building brand awareness, complemented by social media’s capacity for cost-effective targeting with low barriers to entry. Online video is steadily narrowing the spending gap with television, and will be half as large as television by 2024.”

Other digital channels will also keep their feet on the ground with social media and other digital displays rising by just 3% this year, while out-of-home and radio increase by 4%. As a result, Zenith expects 62% of ad budgets to be directed toward digital media in 2022 (up from 60% projected in December), rising to 65% by 2024.

The upshot of this reallocation of resources is that online video should overtake social media as the fastest-growing ad segment over the next three years, with recurring annual growth of around 15.4% expected through to 2024. This is attributed to the rise of connected TV, which now enjoys a higher rate of penetration than cable in the US, with expected ad funded-tiers on Netflix and Disney+ propelling online video ad spend up from $62bn in 2021 to $95bn in 2024.

Social media has been the fastest-growing channel for the past nine years and will continue to grow at a healthy clip, averaging out at 15.1% per year. Meta will continue to hoover up the bulk of this capital, but rising competition from TikTok, Snapchat, LinkedIn and Pinterest has eroded its market share from 89% in 2019 to 85% in 2021. Zenith now forecasts that social media ad spending will reach $187bn in 2022, up from $153bn in 2021.

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