June 16, 2021
Midway through 2021, advertising growth for the year far exceeds previous expectations thanks, in large part, to the pandemic, according to media investment firm GroupM. This has led to a major revision of its global forecast for this year and beyond.
Many of the factors driving this faster growth were in place before the pandemic, but Covid only served as an accelerator. These include faster-than-expected expansions of application ecosystems, rapid creation of small businesses and the growing role of cross-border media markets, particularly involving manufacturers based in China.
Other changes are also taking root. Owners of traditional television networks prioritize investments in content broadcast on streaming services. While many of them will offer ad inventory and capture a share of the total TV advertising, these gains will only offset the reduction in spending on the traditional form of media. As a result, GroupM is seeing faster growth in Connected TV + advertising (what GroupM previously referred to as digital extensions of traditional TV) than expected, but total TV advertising will generally be stable or growing slowly.
In total, GroupM expects global advertising to increase by 19% (excluding political advertising in the United States) in 2021, a significant upward revision from its December forecast. This represents a 15% higher level of ad revenue than in 2019, as 2020 has only seen a 3.5% drop from its revised estimates. High growth is also expected to persist for the foreseeable future.
GroupM now expects global advertising, including US politics, to exceed $ 1 trillion in 2026, up from $ 641 billion in 2020 and $ 522 billion in 2016. It should be noted that the concentration within The industry grew during this period: in 2020, the top 25 media companies accounted for 67 percent of total advertising revenue. This same group of companies represented 42% in 2016.
Looking at individual markets, several are expected to grow above 20%, including the UK, Brazil, China and India. Many more will increase by adolescence, including Canada, Australia and the United States.
Most of the improvement in growth reflected in this update belongs to digital media. GroupM is now forecasting 26% growth for all forms of pure digital media, up from 15% at the time of its December update.
Other areas examined in detail as 2021 reaches mid-term:
- TV Advertising: TV is now expected to grow 9.3% in 2021, an improvement from earlier expectations of 7.8%.
- Beyond this year, GroupM expects low single-digit growth for the media at large, including what it calls connected TV +).
- GroupM estimates that the global Connected TV + inventory represented $ 16 billion in advertising revenue for media companies, up 25% from 2020 levels. GroupM expects Connected TV + advertising revenue to reach 31 billion dollars worldwide by 2026.
- Television’s single reach advantage is expected to erode at a relatively rapid rate in the near term, as investments in ad-free and ad-free video streaming services, primarily based in the United States, will dominate the global industry in the near future. the future. By spending billions of dollars on content.
- Audio Advertising: Audio expectations have been raised significantly in this update, now forecasting 18% growth from December’s 8.7% level.
- However, after 2020’s 27% drop, even with these revisions, we don’t expect support to return to 2019 levels anytime soon.
- OOH Advertising: Outdoor advertising is expected to do well, growing 19% in 2021.
- Although GroupM’s forecast for 2021 represents a slightly slower pace of growth than expected in December, expectations for 2022 are now slightly higher than before.
- In the longer term, outdoor advertising benefits from a growing interest in the medium and is helped by new digital formats which allow the emergence of additional sources of demand.