Global ad spend to hit $579 billion in 2021, says report
Global creative agency, dentsu has released its 2021 global ad spend forecast. According to the latest report, global advertising spend is forecast to recover to 5.8% growth in 2021, reaching a total of US$579 billion, based on proprietary data from across 59 markets.
This represents a significant recovery to advertising expenditure, but not enough to recoup the 8.8% drop recorded over 2020. A return to positive growth is predicted for all regions in 2021, driven by Western Europe (7.5%), Asia-Pacific (5.9%) and North America (4.0%).
Following steep declines in 2020, the fastest growing markets in 2021 are forecast to be India (10.8%), the United Kingdom (10.4%) and France (8.9%). By share of global ad spend, the top five markets in 2021 will be the United States, China, Japan, the United Kingdom and Germany. A Q2 recovery is expected, with ad spend increasing by 2%, 13%, 4% and 3% across quarters versus 2020 on a like-for-like basis, reflecting the severe impact of lockdowns on ad spend in Q2 2020.
In recent years, global TV ad spend has been on a moderate declining trend as viewing habits have shifted to on-demand content. However, during the pandemic in 2020, TV audiences increased across key demographics, including young adults. Traditional TV ad spend is forecast to grow by 1.7% in 2021 to reach US$169 billion, a 30% share of total ad spend.
The focus of the print industry will continue to be on digital transformation, growing digital subscriptions and ad spend, while leveraging the value of existing brands to diversify revenue through digital channels. Traditional newspapers and magazines are expected to continue to decline in terms of ad spend in 2021 by -3.1% and -14.3%, respectively.
For the first time, digital will reach half of total advertising expenditure in 2021, powering overall growth at a rate of 10.1%. Social (18.3%), search (11.0%) and video (10.8%) are the leading sources of digital growth
With restrictions on social activity, outdoor advertising and related out-of-home media (such as cinema) was disproportionately impacted by the Covid-19 pandemic crisis. Box office performance Cinema ad spend is forecast to recover by 41.7% in 2021 (following a drop of 58.3% in 2020), reflecting the expected return to movie houses around the world. New innovations will help attract new audiences too.
Following the return of vehicular and passenger traffic, Out of Home(OOH) ad spend is expected to recover at 14.9% growth in 2021. Digital OOH is evolving quickly, both its offer (including programmatic capabilities) as well as demand (advertisers’ use of this media)
Sporting events, such as the UEFA European Football Championships and Tokyo Olympic & Paralympic Games, are expected to be key drivers of TV ad spend. Growth in 2021 is expected to lay the foundation for a return to pre-pandemic spending levels in 2022, when expenditure is expected to reach US$619 billion (exceeding the US$600 billion recorded in 2019).
Overall, 2021 global ad spend is forecast to remain below the pre-pandemic level of US$600 billion recorded in 2019. However, expectations are that global ad spend will recover and exceed this level in 2022, when forecast spending is expected to hit US$619 billion and a growth rate of 6.9%.
Clearly, all forecasts are dependent on the evolution of the global pandemic, government restrictions and the development and implementation of a vaccine. In line with historical performance, ad spend continues to track GDP closely and as a leading indicator of growth reflects expectations of a recovery in 2021, subject to the caveats stated above.
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