APAC ad market forecast to grow 7% in 2023

The advertising economy in Asia-Pacific will grow by 7% this year – higher than the global average of nearly 5% – with growth powered by India (+12%) and Pakistan (+11%). 

The regional numbers are from an update of Magna’s Global Ad Forecast, which expects global media owners’ advertising revenues to rise 4.6% to reach US$842 billion this year from US$805 billion in 2022, thanks to counter-cyclical verticals and retail media.

Why it matters

While adspend slowed in the first quarter of 2023 due to economic uncertainty and the lack of cyclical drivers, the impact is being mitigated by e-commerce and retail media boosting digital advertising formats, and the counter-cyclical dynamic of large industry verticals like retail, auto and travel.

Key insights

• The 2023 growth forecast is 0.2 percentage points below the previous forecast (Dec 2022: +4.8%) as poor economic conditions and marketing spend in most Western markets is mitigated by stronger-than-expected growth in some markets (China, Spain), industry verticals (retail) and media types (retail, social).
• Global ad revenues across traditional categories in aggregate will shrink by -3% to US$264bn.
• Global television advertising revenues will shrink by 5% this year to US$159bn while publishing ad sales will drop 4% to US$44bn.
• Audio media ad revenues will be stable (-0.5% to US$28bn) and the only traditional media categories to grow will be out-of-home, up 5% to reach US$31bn, cinema (up 23% to US$2bn).
• Digital pure-play advertising sales will grow by 8.5% to reach US$577bn or 69% of total ad sales, driven by organic growth factors (e-commerce, retail media, media consumption shifts).
• Search/commerce formats remain the largest ad formats, approaching the US$300bn milestone (+9.1% to US$296bn), while social media formats reaccelerate by 9.4% to US$172bn.
• Retail media networks are expected to generate US$121bn in advertising sales (+12%), most of it in the form of product search and e-commerce sponsorship.
• The bulk of these ad sales will come from e-commerce pure players but traditional retailers are developing their media capabilities and their ad sales will grow by 24% to US$21bn.
• The strongest ad growth rate this year will come once again from India (+12.3% to US$12.6bn), the 11th largest market, while the Chinese ad market is set to recover faster than expected (+8.4%).
• But most Western European markets will stagnate this year, with Germany, France and Italy all below 3% growth all-media, and negative for traditional media owners.
• In APAC, digital advertising is powering total market growth, with this year’s growth coming from social (+12%) and video (+11%); search also grows 9% but stands at 47% of total digital budgets.
• In 2024, economic stabilisation and the return of major cyclical events will see adspend reach 6.1% to $892bn globally, while digital pure players ad sales will increase by +8%. APAC advertising revenues, meanwhile, will increase by 5% to US$296bn.

Key quote

“On balance, Magna expects the global marketplace to keep growing this year, as it managed to do during the brutal Covid recession of 2020. But of course – like in 2020 – traditional media formats and mature markets will struggle this year. 

Innovation keeps the market moving, however; traditional media owners are developing cross-platform capabilities and brand-safe addressable solutions that are increasingly attractive to brands, and now account for 19% of their advertising revenues” – Vincent Létang, EVP, Global Market Research, Magna.