The Irish advertising market will grow 3.8 per cent to €1.43 billion this year, but advertisers’ spending levels will once again be volatile and short-term in nature, marketing group Core forecasts.
The largest buyer of advertising in Ireland expects to see “small levels of growth” in ad spend across most forms of media in 2023, with the exception of print, for which it is forecasting double-digit decline.
“We have seen a healthy start to 2023, with consumer confidence growing incrementally, and most consumers have weathered a challenging winter. However, there is still a prevailing cautiousness among clients,” said Core chief executive Aidan Greene.
Growth rate
The revenues spent by advertisers in the Republic are estimated to have increased 3.7 per cent to €1.38 billion last year.
The group has revised upwards its previous estimates for 2017 to 2021, so the absolute size of the market is now bigger than it previously anticipated it would be.
However, the growth rate in 2022 was slower than initially expected, as inflationary pressures lingered combined with the economic fallout from Russia’s invasion of Ukraine.
Both inflation and the war in Ukraine will affect advertisers’ confidence again this year, creating a short-term and volatile media market, Core said.
“Uncertain consumer spending and rising costs will have a knock-on impact on the marketing budgets available for many advertisers,” its report states.
With UK-based advertisers estimated to account for about a fifth of ad spend in the Republic, a potential downturn in the UK economy “could impact ad spend” here.
Total online spend will increase 6.1 per cent to €859.9 million this year, Core predicts. This is faster than the 2.6 per cent growth rate seen in 2022, a difficult year globally for online advertising, but it still marks a “significant slowdown” on previous years. The average growth percentage for the online market since 2017 has been 17 per cent.
Google and Meta will continue to dominate, Core said, but the rise of TikTok and the potential launch of Amazon.ie are among the trends to watch.
Television ad revenues — excluding broadcasters’ online revenues — will grow 1 per cent this year to €265.5 million after a similar modest gain in 2022.
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Radio revenues, which increased 7.8 per cent last year, will continue to grow in 2023, albeit at a slower rate of 1.7 per cent, taking the market to €155.2 million. Digital audio ad revenues had a strong 2022, expanding 22.3 per cent to €12.6 million, and are expected to grow 16.6 per cent this year to €14.8 million.
Print proved “more resilient than anticipated” last year, with revenues flat at €82.4 million, although digital news media advertising is estimated to have dropped 5 per cent to €31.4 million.
However, Core forecasts that print expenditure will sink to €73.8 million this year, down 10.4 per cent. Digital ad spending with news publishers will return to growth, rising 4 per cent to €32.7 million.
Reducing pagination
Despite the abolition of VAT on newspapers, inflationary pressures will force the sector to cut back on costs, Core anticipates.
“This will include options like reducing the pagination of the paper, cutting back on the number of days they have a printed version or moving completely to a digital-only version of their paper.”
Out-of-home ad revenues, which suffered during the pandemic, rose 24.1 per cent last year to €70.5 million and are forecast to expand 8 per cent this year to €76.2 million. This is still 16 per cent lower than pre-pandemic levels.
Cinema advertising is also yet to fully recover from the Covid crisis. Ad spending on the big screen grew 62.2 per cent to €3.52 million last year, but this remains less than half the €7.6 million level of spending seen in 2019.
Core forecasts that cinema ad revenues will climb 15 per cent this year to €4.1 million, but it adds that they will take “some years” to return to their pre-Covid health.
