At the end of last year, industry forecasts for global advertising growth were 3.5-5.0%. This week, Dentsu trimmed its forecast but only marginally, reducing global ad spend growth from 3.5% to 3.3%, with Digital still expected to grow by 7.8%, driven by retail media, CTV and programmatic. Dentsu expects UK to remain the strongest growth region in EMEA, forecast to grow 3.1%. This is a more positive estimate compared to AA/WARC, which projected 0.5% growth in 2023 for UK ad spend in April. Elsewhere, two partnerships with global marketing holdcos were launched this week. Nvidia and WPP are teaming up on a generative-AI advertising platform. This follows Google last week, which also launched AI-supported creative advertising tools. Publicis has formed a partnership with ITV to target ITVX audiences. In other news, as social media competition heats up, a survey on influencers has found that YouTube is the most profitable platform for creators for brand deals. Finally, Meta threatens, again, to ban news if requested to pay for it.
News of the week
Dentsu lowers 2023 ad spend growth forecast to 3.3%
As part of its mid-year review, Dentsu has trimmed its global advertising forecasts for 2023 to 3.3% growth, down from the 3.5% expected in December. While there is still growth, if you strip out inflation, on real terms ad spend is expected to decline by 0.6%. The downgrade reflects reduced growth in high-volume ad categories such as automotive, pharmaceutical and travel/transport, despite cosmetics/personal care and telecoms being expected to outperform previous expectations. Digital advertising remains the largest segment, with 7.8% growth – with strong growth expected from retail media (18%), CTV (15%), and programmatic (14%), while search (9%) should also benefit from AI developments. The UK is expected to be the fastest growing within EMEA this year with 3% growth, despite a reduced forecast. In contrast, in December GroupM released a more optimistic forecast, projecting 6% growth for global advertising (ex- US Political) and 8.4% growth for Digital (pure play) for 2023. Digiday, Campaign
WPP and Nvidia partner on a generative-AI powered advertising tool
WPP and Nvidia are working together on a digital advertising platform powered by generative AI. The technology, built on NVIDIA AI and Omniverse, will allow WPP to create realistic advertising campaigns at speed and at scale. It connects product design data from industry standard tools to build accurate models of products, which can then be integrated into images/videos created through generative AI. For instance, a car can be placed in any surroundings very quickly, such as a desert or a rainy street, which could historically take days of filming and editing (watch demo: YouTube). The tool also ensures that the images used to train the generative AI are fully licensed from Adobe or Getty Images, addressing the copyright issues that often arise with this technology. Nvidia shares have recently surged, reaching a $1trn market cap, as it estimated significant revenue upside driven by generative AI. WPP's share price also jumped up following the news of this partnership. FT
Meta threatens to block news in California over journalism bill
Meta has warned that it will block all news articles on its social media platforms in California if the state passes a bill that would require tech companies to pay a fee to news publishers for using their content. The bill, called the California Journalism Preservation Act, aims to support local news outlets that have suffered from declining advertising revenue. Meta argues that the bill is a "slush fund" that mainly benefits large media corporations. This move comes as part of its resistance to any global regulation that would force it to share its profits with news publishers. Meta, alongside Alphabet, is facing similar challenges in other countries, such as Australia and Canada, where it has also threatened to withdraw its services or limit features. Publishers have long argued that big techs have an unfair advantage in the online advertising market and exploit their content without paying a fair price. The tech giants counter that news publishers utilise their platforms to drive traffic and revenue to their websites. Reuters, Washington Post
Creators earn more from branded partnership on YouTube than other platforms
As the creator economy continues to grow, brands have been increasing work with influencers across a range of social media platforms to reach highly engaged audiences. A survey conducted by the influencer marketing platform Aspire highlights that YouTube is the most profitable platform compared to Instagram and TikTok for creators working with brands. YouTube has significantly higher engagement rates across all influencer tiers, allowing Youtubers to set more consistent rates and earn more from brand partnerships. However, the majority of creators surveyed still favour Instagram as the ‘main platform of choice’, which is also the ‘priority channel’ for brands and marketers. AdAge
Publicis Media and ITV team up to better reach ITVX audience
Publicis and ITV have teamed up to offer a new way of targeting audiences on ITVX, the online streaming platform of ITV. The partnership leverages capabilities from both parties: Publicis offers PMX Lift, which provides cross-channel planning and measurement, and Epsilon, which provides identity data. ITV brings in audience data and its programmatic video advertising platform Planet V. In addition, a third-party InfoSum supports safe data collaboration between Publicis and ITV. The partnership aims to reduce wastage and improve targeting beyond broad demographics on AV campaigns. Birds Eye, the frozen food producer, is the first brand to use this combined offering for its campaign. Campaign
Other news
- Sky plans to cut hundreds of jobs as the business shifts to the internet. FT
- Brandtech Group completes the purchase of digital agency Jellyfish. Campaign
