Dive Brief:

• Global advertising spending is projected to increase 4.6% in 2024 to reach $752.8 billion, a rate of growth above what the industry experienced in 2023, according to the latest Dentsu forecast.

• However, the agency network cautioned that media pricing inflation might be clouding the picture next year. When tracking global ad spending at constant prices, 2024’s growth lands at around 2.5% versus the 2.7% growth seen in 2023.

• Digital will continue to drive momentum, commanding $442.6 billion, or 58.8%, of the ad market in 2024. But the channel, which recently hit a single-digit rate of growth for the first time, will remain on a slower upward trajectory in 2024 (up 6.5%) and beyond.

Dive Insight:

Dentsu joins other agencies in priming 2024 to be a stronger period of advertising growth, with some key qualifiers. Much of next year’s optimism is pegged to major cyclical events that could provide a boost for beleaguered marketers, including the Olympics, UEFA Euro 2024 football championship and the U.S. presidential election. Overall, 2024’s rate of growth appears to be higher than this year’s, but that’s only when factoring in media pricing inflation.

Given the nuances in analyzing today’s market, Dentsu for the first time has expanded its research to include metrics like gross domestic product (GDP) and population in relation to ad spending. Advertising in 2024 is expected to make up 0.75% of GDP, on average, among the countries tracked by the agency. That figure is slightly above the historical average, but some regions make up an outsized portion of ad spending, including Japan, the U.K. and the U.S.

Brands also face increasingly higher costs to reach individual consumers in a highly fragmented media landscape. Advertisers next year will spend $139 per capita at the global level, a roughly 75% increase from two decades ago, according to Dentsu.

“Audiences are receiving an increasing volume of ads, so finding new ways to drive ad effectiveness has never been more important,” said Will Swayne, president of Dentsu’s global media practice, in a statement. “We are seeing an increased focus on planning and buying for attention, over pure reach, as more brands seek to maximize their return on investment and capitalize on the attention economy tools available to them.”

The need for precision could help explain why digital now accounts for over half of the total advertising pie. Among digital channels, retail media will accelerate the fastest in 2024 with a 17.2% three-year compound annual growth rate, a boost potentially resulting from the deprecation of third-party cookies, a mainstay ad-targeting method. Retail media will be followed by social media at a 12.3% three-year CAGR and programmatic media with a 10.2% three-year CAGR. Programmatic already accounts for more than 70% of digital investments, although scrutiny of the tactic has been on the rise as research reveals that a large chunk of spending is wasted on nonviewable inventory and clickbait websites.