New Delhi: Global advertising spend is expected to rise 12.6 per cent during 2021 as a whole to reach $665bn, according to WARC Data’s report tracking global ad-spends. This is a sharp increase from the 6.7 per cent initially forecast, and would result in all of 2020’s losses being recouped, contrary to previous expectations.
The new report signals renewed optimism in the situation getting better for the overall market as it recovers from the severe impacts of the pandemic. According to WARC Data, a further growth of 8.2 percent is predicted for next year, with the global advertising market to be worth more than $700 billion. While it took six years to move from $500bn to $600bn, it has now taken just four years to reach $700bn. This is in no small part due to rapid investment in online formats, which has doubled in the last five years, it stated.
India, too, will see strong growth in advertising spend over the next two years, but 2021 investment will not fully recover 2020’s losses, said WARC Data in its latest report, tracking 100 markets worldwide. According to the report, India’s growth is up 16.1 percent to $8.2 billion in 2021.
Regional advertising investment in the Asia Pacific is forecast to increase by 12.8 percent this year to top $200 billion for the first time. This will be driven by the Chinese ad market, which is expected to grow by 16.3 percent to exceed $100 billion for the first time.
WARC’s quarterly research also finds that advertising spend in the second quarter rose 23.6 percent to $157.6 billion, marking a new high for a Q2 period and the strongest rise in over a decade. This growth was mainly driven by online formats, which collectively saw spend rise 31.2 per cent versus the previous year. eCommerce was the star performer with growth of 59.5 per cent, though offline media – most notably linear TV saw 11.5 per cent growth – also fared well.
Linear TV to grow 7.1 per cent in 2021
For linear TV, spend is projected to grow 7.1 percent to $168.1 billion this year, equal to a quarter (25.3 percent) of the global ad market. Investment is expected to rise by a further 2.7 percent in 2022, though this means just 60 percent of 2020’s losses will be recovered by 2022.
“The 2020 downturn was felt disproportionately among legacy media owners. While online ad investment rose 9.4 per cent last year, mostly to the benefit of a few pure players, brand spend on legacy media such as print, TV, radio, outdoor and cinema fell by $63bn. Data show that this loss was on a par with the Great Recession,” as per WARC.
The forecast suggests, legacy media will see two consecutive years of growth in 2021 (8.8 per cent) and 2022 (3.1 per cent) for the first time in a decade, but budgets will continue to move online. More than 60 per cent of spend is expected to be on digital media in 2022, an increase in share from 50 per cent before the pandemic in 2019.
“New quarterly research, collated from 100 markets worldwide, shows for the first time the true extent of the digital shift in response to the coronavirus outbreak last year. Growth in online adspend has typically tracked some 20 percentage points ahead of offline media, but in the final quarter of 2020, this leaped to a remarkable 41 points—an absolute difference of $41 billion,” WARC Data, managing editor and author of the report, James McDonald.
“Investment in offline media fell by $63 billion worldwide in 2020, marking the worst year in living memory for the majority of media owners. All media are forecast to record growth this year, with most sustaining this into 2022. Yet, as has been seen before, it is the online platforms that are set to benefit most from the ad market’s recovery.”
All consumer-facing product sectors are expected to increase advertising spend this year. The travel sector, however, will take more than two years to lift spend back to pre- pandemic levels, it added.
