The events of 2020 meant that global advertisers were forced to cut back on spending originally planned for the year. And, although the world is still dealing with the pandemic, there is some good news on the advertising front. The latest forecast [press release] from Zenith estimates that global advertising spend will grow by 11.2% this year.
The forecast estimates that global advertising expenditure will reach $669 billion in 2021. That’s 6% higher ($40 billion) than what was spent on advertising in 2019. Furthermore, the next couple of years are set for further growth, with Zenith estimating 6.9% growth in 2022 and 5.6% in 2023.
Although digital advertising was already on the rise prior to the pandemic, the shift to digital during the past year has led to more ad dollars being allocated to digital channels. Indeed, digital ad spend is set to grow 19% year-over-year (y-o-y) in 2021. With this growth, digital advertising is expected to account for 58% of total ad spend this year, up from 54% in 2020.
Digging a bit deeper, social media ad spend is expected to grow by 25% y-o-y to reach $137 billion. This growth will allow social media spend to clip that of paid search, which is estimated to total $135 billion (up 19% y-o-y).
While the expected growth in social media and paid search ad spend is impressive, it’s online video advertising that is predicted to be the fastest-growing digital channel this year. With y-o-y growth of 26% this year, online video ad spend is forecast to reach $63 billion.
For the most part, traditional media channels will also benefit from growth this year. After a fairly devastating year for both cinema and out-of-home (OOH) advertising, the future does look brighter. Ad spend for cinema is expected to more than double (+116% y-o-y) this year, after a decrease of 72% in 2020. For its part, OOH advertising, which fell by 28% y-o-y in 2020, will grow by an estimated 16% y-o-y in 2021.
Radio and TV advertising will also see modest growth this year (4% and 1%, respectively), while print advertising will continue its decline, shrinking 8% y-o-y.
Zenith points out that the recovery in ad spend, along with the move of audiences over to digital channels, has led to increased media prices. One prime example is TV advertising, which has seen prices inflate by an average of 5% this year. But it’s not just traditional channels that are seeing this inflation: Zenith reports that online video inflation is averaging 7%.