A promising forecast for the advertising industry predicts a 5% rise in global ad spending this year, with digital advertising leading the charge. The latest data from Dentsu, a global advertising holding company, predicts an impressive 7.2% increase in digital ad spend.
Will Swayne, Dentsu’s Global Practice President (Media), highlighted this trend during an interview at the Cannes Lions International Festival of Creativity. “We’re going to see an increase in the shift towards digital, which means digital is now 60% of the total advertising spend globally,” Swayne told Euronews Business.
Within the digital sphere, certain segments are experiencing rapid growth. Connected TV, social media, and retail media are particularly thriving across Europe and the US. This surge is driven by advertisers’ need to adapt to shifting consumer behaviours and technological advancements.
The optimistic outlook for digital advertising comes amid challenges posed by inflation, which has impacted consumer spending power. As a result, advertisers are reassessing their strategies to maintain and grow their market share. “A number of consumers have taken on a lot of the cost of inflation and the increased pricing of those products,” Swayne noted. “What we’re seeing now is that there’s been some volume drop.” Now it’s all about how advertisers ensure that their brands are building up market share and volume again.”
As businesses navigate the post-pandemic economic landscape, there is a shift from the “growth at all costs” mindset to a more sustainable approach that balances profitability with long-term stability. This involves leveraging advanced digital tools and platforms to create more effective and engaging advertising campaigns.
A key factor driving the success of digital advertising is the increasing relevance and personalisation of ads. “That’s the exciting thing about advertising becoming increasingly digital. It’s becoming increasingly accountable,” Swayne explained. This accountability allows advertisers to deliver the right message to the right consumer at the right time, enhancing the effectiveness of their campaigns.
Artificial intelligence (AI) is playing a transformative role in the future of advertising. Major platforms like Microsoft, Google, and Meta are integrating AI into their operations, enabling more precise targeting and personalisation of ads. “AI plays a massive role in the future of advertising, particularly as we see that digitalisation is happening,” Swayne said. This integration helps advertisers become more efficient and effective in reaching their target audiences.
Despite the growing influence of AI, the advertising industry remains mindful of maintaining a balance between automation and human creativity. There are ongoing concerns about data privacy and the ethical use of AI in advertising. “There is always going to be a balance between AI, automation, and people,” Swayne emphasised. It is critical to understand the appropriate use cases for AI while also ensuring that human creativity and strategic thinking continue to drive the industry forward.
As digital advertising continues to expand its dominance, the industry is poised for significant growth in 2023. AI advancements are driving a shift towards more personalised and accountable advertising, reshaping the landscape. However, the balance between technological innovation and human talent will be key to navigating the evolving advertising environment. As Swayne and other industry leaders at Cannes Lions highlighted, the future of advertising lies in the seamless integration of digital tools and human creativity, driving both profitability and sustainability.