Which Media Are Recovering to Pre-COVID Ad Spend – or Exceeding It?

October 25, 2021
MAGNA 2021 Ad Spend by Medium Compared to Pre COVID Oct2021

While the COVID-19 pandemic had a negative impact on global ad spending in 2020, ad expenditures are bouncing back this year. With advertisers feeling more confident as restrictions are lifted and aspects of life return to some semblance of normal, a recent forecast from MAGNA estimates that ad revenues across all media will be 24% higher in 2021 than they were in 2019.

MAGNA projects that advertising revenue will reach $277.6 billion this year, growing by 23% over 2020. This is compared to the less than 1% year-over-year (y-o-y) growth in ad revenue seen in 2020. However, revenues across media, as a whole, are forecast to be higher this year than they were in 2019, with much of that due to increased investment in media types that suffered very little, if at all, during the first year of the pandemic.

For instance, at the start of the pandemic, advertisers diverted ad spend to digital channels such as social, digital video and paid search. As such, ad revenues for social (21.4%), digital video (Pure Players; 41%), CTV/OTT (22.6%), and paid search (11.6%) all benefited from y-o-y growth in 2020. And, looking at MAGNA’s COVID index (which compares forecast 2021 spend with 2019 expenditures), ad revenues in 2021 for social are forecast to be 65% higher than they were in 2019, while media owners’ revenues for search (+51%), digital video (+106%) and CTV/OTT (+64%) are also expected to be significantly higher in 2021 than in 2019.

Traditional Media Slower to Recover

On the other hand, traditional media did not fare well in 2020, and their recovery is slow in coming. This is most clearly demonstrated with out-of-home (OOH) advertising and cinema advertising. Prior to the pandemic, OOH advertising revenue in the US experienced consistent quarterly growth. Once the pandemic hit, quarterly OOH revenues plummeted. And, while MAGNA estimates OOH ad spend in 2021 will grow by 15.8% over 2020, revenues in 2021 are still forecast to be 13% lower than they were in 2019.

It’s safe to say that cinema is one of the media types most negatively impacted by the pandemic. Last year cinema ad revenues dropped by 79.9% y-o-y. Even with a predicted y-o-y growth of 56.3% this year, cinema ad revenues are forecast to be 69% lower in 2021 than they were in 2019. 

Ad Revenue Forecast for 2022

Looking ahead to next year, MAGNA predicts that total ad revenue will grow by 11.6% y-o-y, with cinema ad revenues expected to see the fastest growth (152% y-o-y). Total video ad revenue is estimated to grow by 9.2%, bolstered by double-digit growth in CTV/OTT (28.4% y-o-y), Pure Play digital video (23.1% y-o-y) and broadcast and cable local advertising (15.5%). Likewise, paid social (16.7%) and paid search (15.5%) will also see y-o-y growth in revenues.

Meanwhile, audio ad revenues will see modest y-o-y growth (5.8%) next year, while broadcast and cable national advertising (-2.6% y-o-y) and other digital (including Pure Play display and other digital formats; -6.1% y-o-y) are forecast for a cut in ad revenues.

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