After a challenging year last year for global advertising, in which spending fell by 8.8%, 2021 is expected to bring a rebound in ad investment. A report [download page] from dentsu, which forecasts ad spend into 2022, estimates that this year will bring global ad spending growth of 5.8%.
The report points out that, historically, global ad spend has aligned closely with GDP. Depending on the pandemic, government restrictions and the execution of vaccine campaigns around the world, growth is expected both this year and next (+6.9% y-o-y) to ultimately reach $619 billion by the end of 2022.
Regionally, North America is forecast to see the smallest growth rate this year (4%), with the US expected to see a modest 3.8% year-over-year (y-o-y) while continuing to account for the largest share (37.9%) of total global ad spend. Ad spend in Canada, however, is set to grow by 7.2% y-o-y after a drop of even greater magnitude (9.6%) in 2020. Canada is predicted to rank within the top 5 markets for ad spend growth
In Latin America, where ad spend in 2020 had its biggest decline (-18.4%), ad expenditures are expected to grow by 10.2% y-o-y, making it the region with the largest projected growth in 2021. Western Europe (7.5%), Central and Eastern Europe (7.2%) and Asia-Pacific (5.9%) are also expected to see above-average y-o-y growth.
Ad Spend Share and Growth by Media
Digital media accounted for 48% of total global ad spend in 2020 and is expected to account for a full 50% in 2021. This is about on par with estimates given by Zenith, which predicted digital would represent 51% of ad spend across the globe in 2021.
This year, digital ad spend is forecast to grow by 10.1% y-o-y, after being the only form of media that saw any growth in 2020 (3.2% y-o-y).
Social media is expected to see the fastest growth (18.3%) this year of all the digital channels analyzed, followed by paid search (11%) and online video (10.8%). This finding is supported by research from WARC which found that YouTube, Google, Instagram and TikTok are the platforms the largest share of marketers expect to increase their investment in this year.
TV, which is expected to account for 29.9% of total global ad spend this year (down from 31.1% in 2020), is predicted to grow by a mere 1.7% worldwide over 2020. This is somewhat slower growth than has been estimated by GroupM.
Accounting for a predicted 5.8% of global ad spend in 2021, radio is set to see y-o-y growth of 4.7%, while cinema — comprising 0.4% of ad spend this year — is expected to see spending grow by an estimated 41.7% y-o-y.
Ad Spend Across Industries
After projected growth in the Transportation and Tourism industry was dashed by the pandemic last year, leaving WARC to predict ad spend would drop 31.2% y-o-y, dentsu forecasts that Travel & Transport will see global ad spend growth of 28.4% y-o-y in 2021.
The Media & Entertainment (14.5%) and Automotive (13.8%) industries are also projected to see double-digit growth over 2020, while ad spend in the Technology and Retail categories is predicted to grow by 6% and 5.3%, respectively.
To read more, the full report can be found here.
About the Data: Forecasts are based on Dentsu’s local market expertise and data collated from its brands. “Forecasts are based on the assumption that an effective global vaccination programme will be rolled out in 2021, enabling key media events to take place.”