Warc downgrades its adspend growth predictions for 2022 and 2023
By our News Team | 2022
Apple’s decision to block ad-tracking by default on its iPhones will have a big impact, as will Google’s third-party data moves.
Warc, the international insights and marketing intelligence company, has downgraded its growth expectations for the global advertising market for this year and 2023, as Apple’s decision to block ad-tracking by default on iPhones appears to have negatively impacted social media spend.
The Ad Spend Outlook 2022/2023: Impacts of The Economic Slowdown report forecasts that global advertising investment to rise by 8.3% this year to US$880.9-billion, partly driven by positive results from advertising holding companies in the first half of the year, and an expected boost from the US mid-term elections and the FIFA World Cup in Qatar in the second half.
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However, the report predicts this growth will slow to 2.6% in 2023 as investment is restrained by economic conditions, as well as a reduction in third-party cookies used for marketing purposes. The forecast is based on data gleaned from 100 markets around the world.
Warc’s latest prediction is a downgrade of 4.3% to the previous 2022 growth forecast, and a 5.7% drop in the 2023 forecast – compared to the company’s previous global expectations released in December 2021.
Drop of almost US$90-billion over two years
These figures equate to drop in growth potential of almost $90-billion over the next two years.
Warc believes social media advertising spending will grow by 11.5% in 2022, compared to 47.1% in 2021. In 2023 this is expected to decrease to 5.2% growth.
Some of this is due to the impact of small and medium-sized businesses “bearing the brunt of worsening economic conditions”, leading them to reduce advertising activity, which negatively impacts the social media platforms the hardest.
In addition, Apple’s blocking of third-party cookies across its approximately two-billion devices has already had an adverse impact on social media companies relying on this data.
According to Warc, this and Google’s now-delayed decision to deprecate cookies from its Chrome browser will remove $40-billion from social media companies’ bottom line in 2022 and 2023.