Global ad market seen surging to new highs this year

The rebound in global advertising this year has accelerated well beyond earlier expectations, leading to a massive upgrade to Magna’s 2021 global advertising spending forecast. 

Whereas last autumn, Magna, the intelligence unit of IPG’s Mediabrands, predicted a 7.6% global rebound in 2021, that figure has now been upgraded to record-high growth rate of 13.5%, or $78bn, en route to an all-time high of $657bn in ad spending this year. Such growth stands in stark contrast to the 2.5% drop seen in 2020. 

North America had the largest 2021 forecast upgrade from 4.2% in Magna’s autumn 2020 outlook to 14.9% in this current spring 2021 forecast, followed by Latin America’s upgrade from 8.3% to 14.8% growth rate for this year. The APAC market, which will grow by 12.8% to reach $203bn, had the least change from Magna’s earlier forecast, but all regions were given upward revisions. 

Magna attributes the sharp turnaround to the global economic recovery which is seeing activity to return to many Covid-affected verticals like automotive, entertainment, restaurants and even travel, alongside the return of key global sporting events like the Tokyo Olympics and Euro 2020 football tournament.

Of this spending, digital advertising continues to record the most growth, with Magna doubling its earlier forecast of 10% to 20% digital growth this year to $419bn, representing 64% of total ad sales. Linear ad sales will continue to stablilise with $238bn in predicted spend, but now at a slower growth rate of 3.1%. 

All of the 70 ad markets monitored by Magna are set to expand this year, with the largest gains coming to some of the world’s biggest markets, namely the UK (16.8%), China (16.1%) and the US (15.1%). 

“As economic recovery is stronger and faster than anticipated in several of the world’s largest ad markets (the US, UK and China, in particular) and consumption accelerates, brands need to reconnect with consumers,” Vincent Létang, executive vice-president, global market research at Magna and author of the report, said.

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“At the same time, the acceleration in ecommerce and digital marketing adoption that started during Covid, continues full speed into 2021, fuelling digital advertising spending from consumer brands as well as small and DTC businesses. This unique combination of cyclical, organic and structural drivers will lead to the strongest advertising annual growth ever monitored by Magna.”

While these record growth trajectories are unlikely to persist beyond this rebound year in 2021, Magna still predicts healthy global adspend growth of 6.6% again next year, with all but one market expecting single-digit growth. India, which was hardest hit by the pandemic last year, is the only ad market forecast to see double-digit growth (13.6%) in 2022. 

A version of this article first appeared on Campaign Asia



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