End-of-year forecasts for 2021’s advertising market growth are better than expected, showing a strong recovery after the peak of the COVID crisis. Long term, predictions from international marketing intelligence service WARC see overall global advertising spend reaching $1 trillion in 2025. The growth is good news, but as always, the biggest share will go to Google, Facebook and Amazon.
Takeaways
- The global advertising economy is projected to grow at its fastest ever rate according to a consensus built around individual market estimates released by three of the advertising industry’s leading forecasting units; Magna, GroupM and Zenith.
- Averaging the three predictions, the consensus around advertising revenue growth for 2021 is up by more than 3%, to +19.8%, for the United States and 4%, to 17.1%, worldwide. Predictions for record ad expansion in 2021 come as estimates for 2020 show market contraction, down 2% in the US and 3.8% globally.
GroupM Business Intelligence Global President Brian Wieser described this year’s numbers as being ‘well above historical norms’ and said:
We’re creating a new plateau for future growth to occur.
Above average growth
The averaged growth predictions are impressive in themselves, but the individual figures from GroupM and Magna are significantly higher than that predicted by Publicis Media’s Zenith. It came in with growth forecasts of 18.6% for the US and 15.6% globally.
WPP’s GroupM increased its 2021 growth estimates for the United States by 6.2% to 22.7%. Its global advertising spend estimate rose 3.3% to 20.6%. IPG Mediabrand’s Magna revised its June growth estimate for worldwide ad spending in 2021 up 8.2%, from 13.5% to 21.7%.
Magna EVP for Global Market Intelligence Vincent Letang described the economic effects driving record growth as a “once in a lifetime planetary realignment”. GroupM’s Wieser said:
This is a ridiculously strong ad market… I think this is possibly the fastest growing year ever in terms of the ad industry…
Global growth
Marketing intelligence service WARC echoes the consensus predicting record global growth for 2021 of 23.8% to take the advertising market across 100 countries to $771 billion. The numbers indicate the biggest ad market growth in the 40 years that WARC has been monitoring advertising spend.
The fastest growing area of online advertising spend in 2021 was social media, up 41.9% to reach $188.8 billion. Instagram was the largest social media platform in 2021, overtaking Facebook for the first time. TikTok grew its ad revenue 151.5% in 2021 and expects to achieve a 75% increase next year.
News and magazine publishers continue to see print advertising revenues decline, but online revenues increase. By 2023, online platforms are predicted to account for 42% of total newsbrand ad revenue; in magazines, online ads are set to account for 49.6% of ad revenues.
Future forecasts
Looking into the future, WARC expects advertising budgets to continue increasing – 12.5% in 2022 and 8.3% in 2023 – with e-commerce platforms leading the growth. This sector of the advertising market is expected to have more than doubled from 2020 to reach a total value of $137.2 billion.
A survey of 1,500 marketers carried out recently by WARC underlines the industry’s commitment to ecommerce promotions. The results show two out of three marketers are already spending money with Amazon, with plans to increase their budgets.
Amazon’s growing strength in the advertising market puts it alongside Google and Facebook as the world’s biggest advertising platforms. WARC predicts that the triopoly are on track to claim more than 50% of a global advertising market expected to be worth $1 trillion by 2025.
