Digital ads rose to account for 64.4% of total advertising in 2021: GroupM

Global end-of-year forecast show a much faster expansion in the advertising industry than previously anticipated, driven primarily by growth in the US, UK, and China, states GroupM’s ‘This Year Next Year’ report.

Looking at the top 10 advertising markets over longer time horizons, the report envisaged that growth should moderate, with France, Germany, Australia and the US all poised to grow in a range of 4-5% annually, on average, over the next five years, while markets including India, the UK, Brazil, Canada, Japan and China are forecast to grow between 6-8% annually, on average.

According to the report, some of the key factors causing faster-than-expected growth are:

• New small businesses allocating greater resources to nationally oriented digital advertising
• China-based marketers capitalising on low-cost international shipping and using global digital platforms to reach overseas consumers
• App developers or other “digital endemic” businesses rooted in the internet economy, many of which focused on advertising-driven top-line revenue growth

Overall industry forecast:

2021 growth: 22.5% (excluding US political advertising), an upward revision from June’s prediction of 19.2%.

2022 growth: 9.7% (excluding US political advertising), an upward revision from June’s prediction of 8.8%.

Many underlying trends appear to be disproportionately concentrated in the US, the UK and China, which together account for approximately 70% of all the industry’s growth, despite making up about 60% of the total market.

Here are the major areas considered in detail as we reach the end of 2021:

• Digital advertising: likely end 2021 growing by 30.5%, up from June’s forecast of 26% growth.
• Digital advertising accounted for 64.4% of all advertising in 2021, up from 60.5% in 2020.
• Alphabet, Meta and Amazon account for 80-90% of the global total.
• Television advertising: forecasted to grow by 11.7% in 2021, up from June’s estimate of 9.3%. Given 2020’s decline of 13.7%, the industry is not expected to return to 2019 levels until 2023.
• Subsequent years will be roughly flat – up 1-2% per year through 2026 – for television advertising in most major markets around the world, as the largest advertisers continue to incrementally shift spending.
• Overall, Connected TV+ will account for about 10% of total TV advertising in 2022 ($17 billion of a total of $171 billion) and is expected to double by 2026.
• Audio advertising: Expectations for audio are that it will grow 15.6% in 2021 and 6.4% in 2022. In subsequent years, we assume a reversion to historical trends: largely flat.
• OOH advertising: Outdoor advertising is expected to grow 17.1% in 2021 and 14.9% in 2022. In subsequent years, we assume a reversion to historical trends: mid-single digit growth.