The In-Real-Life (IRL) global ad investment will reach $ 44.4 billion in 2022, down 1.6% on pre-COVID levels, as per the latest WARC's Global Advertising Trends: IRL Ad Economy.
As consumers worldwide steadily return to offices, restaurants and physical retail stores, WARC investigated the health of the advertising experienced by consumers when they leave their homes – channels like out-of-home and cinema media. They’ve dubbed this the ‘IRL [in real life] ad economy’.
The new WARC analysis comparing global ad spend with the latest citizens mobility data reveals that the recovery of investment in out-of-home (OOH) and cinema is outpacing the return of consumer activity to pre-pandemic levels.
This definition only includes paid media, and may benefit from further analysis of sponsorship, events and in-store activity.
WARC Data compared global OOH and cinema ad spend with The Economist’s ‘normalcy index’, tracking public activity across transport, recreation, retailing and work.
WARC’s forecast shows that IRL ad spend worldwide will reach $ 44.4 billion in 2022, a shortfall of $ 0.7 billion on the $ 45.1 billion spent in 2019, but nonetheless tracking ahead of consumer activity levels. The recovery will continue into 2023, when the IRL ad market will reach a new high of $ 47.1 billion.
Worldwide OOH ad investment to increase 16.5% year-on-year in Q1 2022
It says that OOH media owners are beginning to claw back some of the ad investment lost during the pandemic. A 16.5% year-on-year increase is forecasted for Q1 2022, reaching $ 10.9 billion globally, with growth slipping back to 11% in Q1 2023.
As per WARC, the recovery from Covid-19 may only be completed in 2023. Out of a dozen major markets analysed by WARC Data, only Australia (+1.5%) and the United States (+0.9%) can expect OOH ad spend in 2022 to match or better total annual ad revenues from 2019. The OOH spend slump is most pronounced in India (-42.1%) and Brazil (-27.4%), while investment in Italy is forecast to be 21.0% down on pre-COVID levels.
Rising OOH media costs represent a further cause for concern for brands. Global inflation in the channel hit 9.4% in 2021, and is forecast to reach 4.6% in 2022, as advertiser demand increases and the costs of running digital signage increase in light of rising energy prices.
China’s cinema ad market soars to $ 1.1 billion, up 10.4% on pre-COVID annual revenues
Box office hits like Spider-Man: No Way Home suggest Covid-19 has not extinguished the enduring appeal of an outing to movie theatres. WARC said that annual global ad spend on cinema will reach $ 3.4 billion in 2022, some way short of the peak of $ 3.8 billion in 2019. At a market level, the US cinema ad sales hit only $ 301.5 million in 2021, 60.3% lower than total revenues in 2019.
The great exception to cinema’s global struggles is the significant increase in ad spend seen in China. The popularity of local content is reflected in a buoyant Chinese cinema ad market, which reached CNY 7.0 billion ($ 1.1 billion) in 2021, up 10.4% on pre-COVID revenues.
Alex Brownsell, Head of Content, WARC Media, and author of the report, said, “Consumers live increasingly digital lives. People are more likely to work from home and shop online. Brands are preparing for a future dominated by virtual interactions in the metaverse. However, it’s vital that marketers do not neglect those all-important physical moments between our digital experiences.
“WARC’s analysis of the IRL ad economy shows that brands understand the role that channels like OOH and cinema play in the media mix, and that they are investing ahead of activities such as commuting, in-person socialising and in-store shopping returning to pre-pandemic levels.”
Other market intel as per WARC are:
Americas Linear TV sees smaller audiences but higher consumption 59% of urban Mexicans follow influencers on social media Half of Canadians prefer in-store shopping Asia Pacific
Consumers in APAC planning longer holidays this year.
56% of Japanese consumers prefer in-store shopping.
Facebook user growth in the region slows significantly.
Europe, Middle East and Africa 44% of French consumers say they prefer in-store shopping.
A third of UK retail sales were online in 2021.
German linear TV consumption rises 9%, reach drops 4%.
Global Ad Trends is a bi-monthly report which draws on WARC’s dataset of advertising and media intelligence to take a holistic view on current industry developments. It is part of WARC Data Premium, an enhanced dedicated independent and objective one-stop online subscription service which rigorously harmonises, aggregates, verifies and evaluates data from over 100 reputable source, empowering media decision makers to build strategies with precision.