Media agencies see optimism ahead but they may need to work harder in 2024 to get results from digital advertising.
Various forecasters see upside ahead, including MAGNA which puts Australia's total advertising revenue growth in 2024 at 3.8% to $A27.7 billion.
Dentsu predicts 2.3% but GroupM sees a flat year in 2024 with just 0.9% growth, most of it in the second half.
A pause, and perhaps a reversal later in 2024, on interest rate rises should have a positive impact on the advertising market.
Forrester, the global marketing consultancy, in its Predictions 2024: Media And Advertising study, says there’s new confidence building within the media world.
Marketers will take more risks in 2024 as media budgets stabilise and grow.
Ken Lam, iProspect Australia national head of investment, sees moderate growth for Australia, driven by continuing growth in travel, automotive and food and pharmaceutical, as well as bounce back in the retail, finance and technology sectors.
“There should be optimism for advertisers heading into 2024, and a great opportunity for brands to accelerate growth through opportunities in emerging tech like AI, advancing automation and digitalisation capabilities to maximise performance, effectiveness and outcomes,” he said last month when releasing the latest forecasts.
Duncan Owen, lead strategist at Intentional, says digital advertising will become more challenging.
“Australia's more competitive economic environment demands better brand and product marketing,” he says.
“Using simplistic advertising is unlikely to deliver the same results anymore.
“The landscape for digital ads is evolving. It's getting harder to manually fine-tune ad platforms for better performance. Now, it's more about effectively communicating why your brand or product should matter to your audience.
“At Intentional, we advocate for advertising communication that targets people’s problems or offers them a solution, often thinking beyond immediate sales to build longer term connections.
“Simply forcing product ads to people won't cut it in 2024. We emphasise showcasing the unique value of your brand and why it stands out among competitors is crucial.
“Beyond just Google and Facebook, marketers must also consider additional advertising platforms. This increases the demand for internal tools to interpret ad metrics to help make decisions, instead of relying on biassed metrics provided by ad platforms.
“In 2024, businesses with tailwinds like those in health, pet care, or catering to an older population have an edge. More sophisticated marketers in discretionary spending categories will also excel, as weaker marketers struggle to generate the same advertising returns."
Nick Grinberg, co-founder and head of strategy at Next & Co, expects the advertising market to continue to follow broader macro-economic trends into 2024.
“Slower economic growth and tighter financial conditions will mean an increasing pressure on budgets and getting the most effectiveness from existing or slightly reduced budgets,” he says.
“We will see marketers continue trying to do more with less as they look for efficiencies with their marketing spends, teams and agencies.
“The RBA predicts that Australians won’t see significant income growth till the end of 2024 which means that consumer spending, and therefore marketing budget growth, may be subdued in non-essential categories.
“Digital advertising spend is predicted to grow despite increasing media costs across most major digital channels.
“The overall macroeconomic conditions means we can expect to see many brands becoming gun shy with overall marketing spends. This provides an opportunity for brave brands to capture a larger share of voice in an environment where competitors are potentially backing off.
“It is difficult to say ‘where’ a brand should be investing their money into 2024. However, wherever money is being invested, it is important to hold that investment accountable by having a good measurement ecosystem and aligning the ecosystem behind the growth goals of the brand.”
Tom Frazer, managing director, Half Dome, says 2023 was marked by a cautious business and consumer environment, set against challenging macroeconomic conditions.
“High inflation, rising interest rates, ongoing military conflicts, and natural disasters have collectively influenced a slowdown and, in some cases, a delay in advertising investment decisions. Overall, a modest 2023," he says.
“As we look towards 2024, there are strong indicators of a positive shift and a return to growth. Drawing from our experiences during the COVID-19 recovery, we've observed that advertising spend can rebound quickly when business and consumer confidence are restored.
“Leading into 2024, there is already a greater focus on efficacy and efficiency; targeted advertising, and clear demonstration of business impact.
“The rise of AI in advertising is continuing, and its role is becoming more pivotal, helping to analyse vast amounts of data, uncover deeper insights, automate tasks and enable more efficient campaign management.
“More than ever, we know brand-building activity is important. The proven impacts for long-term performance and brand sustainability are significantly stronger for those who double-down on this during times of downturns. The upcoming Paris Olympics in 2024 is an amazing backdrop for this trend, bringing with it big opportunity for brands.
“And amongst all of this, digital advertising is still growing.
“The key segments where growth is expected as a focus for 2023 include online education, health & wellness and e-commerce.
“We are keenly focused on these areas, in line with our promise to unlock the whole potential of both our clients, and our people, which demonstrates our growth, our ambition, and our drive to continue to dominate market share.”
Sam Buchanan, CEO IMAA, says Australia will see the emergence of a two speed economy of the haves and have nots.
“They are the home owners who have paid off their mortgages and the ‘mortgaged to the hilt’ or renters,” he says.
“In terms of media channels, the IMAA Indie Census survey shows that BVOD/CTV, digital video, programmatic out-of-home and podcasts will record the greatest growth in advertiser spending.
“Our members predicted that linear television, linear radio, and cinema will be flat year-on-year.”
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