Economic Forecast for Advertising: What the Data Says
Alfie Lagos, director at Lexlab, delivers a clear-eyed look at the economic realities shaping 2024. The Australian economy is under pressure, with contractions forecast through Q1 to Q3. Court actions have spiked 45%, insolvencies are up 22% year-on-year, and business sentiment is following consumer confidence into decline.
This economic flu is catching, and the advertising industry is feeling it. The IAB reported a modest 3.7% ad spend growth in 2023, the lowest in a decade, excluding 2020. With consumers cutting back and brands tightening their belts, the focus has shifted toward accountable, results-driven media. Traditional big-budget channels are losing ground to digital audio, CTV, SVOD, retail media and other addressable formats.
The economic forecast for advertising demands brands act strategically, not cautiously. With rising unemployment, inflation targets unmet, and budget constraints, many overleveraged businesses will need to make hard calls. Yet, history tells us brands that stay visible in downturns are the ones who grow in recovery.
The opportunity? A reallocation of spend into more measurable, agile channels. Brands that hold their nerve and stay active can gain market share while competitors retreat. The next few months could define market leaders for the next decade.
Ehrenberg-Bass and IAB data consistently support this approach: maintain your brand presence, even in turbulent markets. The final quarter may bring recovery signs, but it’s the brave strategies taken now that will shape long-term outcomes.
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