Modest growth in advertising spend lies ahead for 2023

It’s that time of the year when the global agency networks start to report their 2022 results and provide some pointers for 2023.

While inflation, rising interest rates and the war in Ukraine did indeed weigh on marketing sentiment for much of 2022, the overall advertising market proved to be somewhat resilient with advertising spend seeing single digit rises across the board as the depth and breadth of services on offer from agencies continues to change.

But, overall, 2022 was not anywhere near as bad as some had feared it would be.

In the case of Irish advertising market, new figures published by Core, the parent company for media agencies Starcom, Zenith and Spark Foundry, suggest that the overall advertising market in 2022 grew by a modest 3.7pc to €1.38bn.

According to Core’s 2023 Outlook report, which will be published next week, the market is forecast to grow again in 2023 by around 3.8pc to hit €1.43bn, with most media channels to get a boost.

Core’s forecasts once again highlight the impact that digital advertising continues to have on advertising spend with advertisers set to spend as much as €860m this year, an increase of 6.2pc on the €810m spent last year. This equates to 59.9pc of all advertising spend in 2023.

A breakdown of this €860m shows that social media advertising will likely account for around 41pc of all spend while search advertising will account for around 37pc. Digital display (16.9pc) and classified advertising (4.5pc) make up the balance.

The growth in the TV advertising market, meanwhile will be a tad slower this year, according to Core. Following a strong 2021, TV advertising revenues grew by just 1pc last year to hit €263m. This is likely to growth by another 1pc this year to €265.5m.

Online video, however, looks set to continue its recent growth trajectory, increasing by 16.4pc to €425m, according to Core. According to the report, “the online video market continued to out-perform the overall market in 2022. Core estimates that it grew by 10pc to €365.2m. Spend across social platforms, dominated by Meta, accounted for approximately three quarters of all spend in video last year.”

Elsewhere, radio and digital audio, which covers podcasting and music streaming services, looks set for another strong year as publishers and broadcasters continue to innovate with new formats and content offerings. Last year, Core estimates that the country’s radio stations attracted around €152.7m from advertising and sponsorship. This year it is forecast to grow by a more modest 1.7pc to €155.2m this year. Forecast growth in digital audio revenues, however, are more robust and are likely to grow by as much as 17pc to €14.8m according to Core.

Unfortunately, Core is not as bullish when it comes to news media with print advertising revenues pencilled in for a 5pc decline to €73.8m in 2023. On the upside, however, their digital advertising revenues will return to growth this year with forecasts pitched at around €32.7m.

Other media channels like out-of-home (OOH) and cinema will also get a boost this year, having encountered difficulties during the lockdowns of 2020 and 2021. Driven largely by the growth in digital, Core has pencilled in an 8pc increase in OOH advertising revenues this year to €76.2m.

Cinema advertising, meanwhile, can expect a post-Covid bounce back with a 15pc increase this year to €4.1m. But it still has some ground to make up to get back to pre-pandemic levels which saw it achieve revenues of €7.6m in 2019, according to Core.

While 2023 will certainly be challenging for all media companies, given the economic headwinds and geopolitical uncertainties, growth of any kind will be most welcome.

Media awards

The closing date for entries to the Media Awards 2023 is less than three weeks away on March 21. A highlight of the advertising and marketing calendar, the awards, are open to media owners, media agencies and brands and are co-sponsored this year by Mediahuis Ireland, publisher of this newspaper. With a 50 strong panel of leading Irish and international judges, the winners will be announced at a gala dinner in the RDS on April 27.

Paddy Power 

With Irish horse-racing fans counting down the days to the annual Cheltenham festival, Paddy Power has launched a major campaign ahead of the four-day event which kicks off on Tuesday, March 14.  Created by BBH London, the campaign features Irish actor Colm Meaney, former England footballer Peter Crouch and actor Barry Evans and plays on the traditional annual rivalry between Irish and English racing fans at Cheltenham every year.