• Brexit led to many companies relocating from London to Dublin, which contributed to the economic boom in Ireland in recent years. Modified domestic demand from European Commission indicates a +8.6% growth in 2022 and a +2% rise in 2023 for the overall Irish economic environment.
• The Ireland’s advertising market grows by +8% in 2022 to reach 1.6 billion euros ($1.9 billion). Digital advertising sales are slowing down but remain above the Western European average in terms of market share.
• In 2023, a +6% ad revenues growth is expected in Ireland to attain over EUR 1.7 billion ($2.1 billion). Traditional media will grow by +3%, and Digital media will grow by +7%
The Irish economy (real GDP) expanded by +9% in 2022 with +8.4% inflation, according to the October 2022 IMF World Economic Outlook. Real GDP is not a fully accurate measure of economic activity in Ireland, however, due to the country’s high level of exposure to multinationals. More than 1,500 multinational companies have their European headquarters in Ireland, particularly in the Pharma, Finance and Tech industries. Brexit led to many companies relocating from London to Dublin and that contributed to the unprecedented economic boom in recent years.
Some of the multinationals’ activities, such as reclassifying assets, can impact the headline economic figures in ways that are not indicative of true macroeconomic conditions. According to the European Commission, modified domestic demand, which can be a better indicator of real economic activity in a market like Ireland that is heavily exposed to multinational corporations. Based on the Autumn 2022 Economic Forecast, the European Commission expects modified domestic demand to expand +8.6% in 2022 and then by +2% in 2023.
In that environment, MAGNA anticipates the advertising market to expand by +8% to reach EUR 1.6 billion ($1.9 billion) in 2022. On the linear media side, the overall growth of +6% is expected in 2022. Television (+9%), OOH (+11%), and Radio (+7%) will all drive the linear growth, while Print (-2%) will see slight lessening. Demand from the Retail and Finance sectors will contribute to strong pricing for television (full-year CPM inflation +23%), along with the return of cyclical sporting events such as FIFA World Cup in November 2022 (broadcasted by RTE).
Although the overall ad spend market has recovered from the COVID impact, linear media has not yet returned to the pre-pandemic level. Television, OOH, and Radio are expected to recover, while Cinema will still slightly below 2019 level by 2027. Print will keep the long-term declining trend and come to only one third of the pre-pandemic market share by 2027.
Digital media has another strong year in 2022, with advertising revenues set to reach over EUR 1.2 billion ($1.4 billion), growth of +9%. Digital advertising sales already account for almost 70% of total advertising activity, above the Western European average of 63%. Within digital ad formats, Digital Video (+15%) and Search (+15%) will see the strongest increase, while Social (+1%) will stand. Over the next five years, we anticipate a digital CAGR of +8%, with the market reaching EUR 1.7 billion ($2 billion) in annual advertising revenues by 2027, 77% market share.
In 2023, a +6% ad revenues growth is expected in Ireland to attain over EUR 1.7 billion ($2.1 billion). Traditional media will grow by +3%. Television revenues are anticipated to keep stable at +2% and keep flat or decline slightly for the next few years.
Radio will keep stable at +4% and OOH will surge by +16% mainly due to high expansion for DOOH, while Print will keep reducing by -3%. Additionally, Digital media will grow by +7% with strongest increment in Video (+12%), followed by Search (+7%), and Social (+6%) growing slower
Commenting on the forecast, Simon Nagle, Trading Director IPG Mediabrands. Ireland, said:“Our forecasts show that we will see less growth than previously estimated for 2023. While we face uncertain times, we do expect growth next year and remain optimistic of what that transpires to be”
