According to forecasts, advertising spending is likely to accelerate at the fastest pace in 2024. The growth ranges between 4.6% and 7.2%, which is double the estimated 2023 growth of 2% %- 5%.
An increase in advertising investmentÂ
Three groups have published their advertising forecasts: GroupM, Dentsu, and Magna Global. Dentsu forecasts growth of 4.6 percent year over year in 2024, which is 2.7 percent higher than its growth in 2023.
Magna stands ahead, projecting 5.5% growth in 2023 and a 1.7% acceleration in 2024. Group M is projecting a 0.5% downfall to 5.3% growth in 2024. Source.Â
Search ads are expected to accelerate. Moreover, digital ads are booming. This includes, video ads, banner ads, mobile ads, display ads and more.
However, digital media advertise formats will account for half of the worldwide advertisement spending next year.
Advertising Budget Methods.
The determination of the advertising budget is one of the most challenging decisions to make. Companies use different methods to fix this problem. Here are some ways to set your advertising budget
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Determine the budget in proportion to sales:
This is the percentage of sales method (projected turnover). This method is based on the idea that we prioritize products with high potential.
To be effective, one must make the calculations in relation to the potential sales and not according to the realized sales. This implies that if sales of a product fall, advertising efforts will also drop.
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Determine it in proportion to the expenses of the competitors:
This is the method on the part of the votes. In this case, if a company wants to boost its market share, it will have to improve its advertising effort faster than that of competitors.
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Determine it from the objectives and the means of advertising:
This method consists of identifying advertising objectives and evaluating the efforts needed to achieve them.
In other words, the budget is determined by the number of people to be reached, and different assumptions about the exposure and sensitivity to advertising in different media as well as the understanding of the messages.
This method does not indicate the optimal advertising budget.
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Determine it practicing the break-even technique:
Which consists of determining the additional sales required to make an additional advertisement expense profitable.
So the expected digital investment would be 22% of the total investment at this time. 85% of the panelists believe that this percentage will grow in the coming months.
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