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Global advertising in 2021 and 2022 will end up growing faster than previously expected as the rebound from the coronavirus pandemic continues, according to media investment giant GroupM’s latest forecast.
But TV ad spending looks set to take until 2023, when the firm’s estimate calls for it to hit $168.6 billion, to reach and exceed the same levels as in the pre-COVID year 2019 ($167.8 billion), it predicted.
After falling 3.1 percent, excluding U.S. political ads to adjust for swings between election and non-election years, to $623.0 billion in 2020, the firm now calls for global advertising to jump 22.5 percent this year to $763.2 billion, up from its June projection of a 19.2 percent gain.
The better-than-expected gains will continue in 2022, with ad spending poised to grow 9.7 percent to $836.9 billion instead of the previously predicted 8.8 percent, GroupM said. In 2025, global media revenue will exceed the $1 trillion mark after hitting $999.9 billion in 2024, according to the latest estimates.
“We recognize the rates of growth observed in 2021 appear to be historical anomalies in an industry more accustomed to mid-single digit levels,” GroupM writes in its forecast, presented at the annual UBS Global Technology, Media and Telecom Conference. “However, a heightened pace of expansion for the advertising industry could very well persist as long as economies around the world are producing companies that are more reliant on advertising than those they replace.”
The report also identified “key factors causing faster-than-expected growth,” including “new small businesses allocating greater resources to nationally oriented digital advertising,” app developers and other digital businesses rooted in the internet economy that have focused on ad-driven revenue growth, as well as “China-based marketers capitalizing on low-cost international shipping and using global digital platforms to reach overseas consumers.”
Looking at regions, GroupM said that “many underlying trends appear to be disproportionately concentrated in the U.S., the U.K. and China, which together account for approximately 70 percent of all the industry’s growth, despite making up about 60 percent of the total market.”
Looking at the top 10 advertising markets over the next five years, the company projects that the U.S., France, Germany and Australia will post growth in a range of 4-5 percent annually on average, while India, the U.K., Brazil, Canada, Japan and China are forecast to grow 6-8 percent annually.
Digital advertising will this year record a 30.5 percent jump, up from June’s forecast of 26 percent and from a 12.5 percent gain in 2020, GroupM said. “Digital advertising accounted for 64.4 percent of all advertising in 2021, up from 60.5 percent in 2020,” it also estimated. “Alphabet, Meta and Amazon account for 80-90 percent of the global total.”
Television advertising is forecast to increase 11.7 percent in 2021, up from June’s estimate of 9.3 percent, following a 13.7 percent drop in 2020. While it will hit $171 billion in 2022, “the industry is not expected to return to 2019 levels until 2023,” GroupM predicted. “Subsequent years will be roughly flat – up 1-2 percent per year through 2026 – for television advertising in most major markets around the world, as the largest advertisers continue to incrementally shift spending.”
Audio advertising though should post a 15.6 percent jump in 2021 and a 6.4 percent in 2022, predicts GroupM. “In subsequent years, we assume a reversion to historical trends: largely flat,” the company highlighted though.
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