Agencies Agree; 2021 Was An All-Time High For Ad Spending, And More Growth Is Anticipated In 2022
Three of the top global advertising agencies (Magna, Zenith, and GroupM) recently released their final forecasts for the market for ads in 2021 and a look at 2022. Predictions were made in both U.S. and global markets. In 2021, the demand for ads had been driven by digital media, particularly video, social, and search, which was higher than the expected midyear.
Advertising is very important because many products and services reach people, who may use them when in need. For example, if you need a loan or struggle with your loan repayments and installments, you know that you may use Greendayonline’s service. But how does a loan rollover? When a loan is not fully repaid within the specified period, it is automatically renewed and known as a rollover loan.
There are many reasons to be considered. The robust growth in ad spending is expected to continue through 2022. It is estimated that the U.S. ad market is projected to reach $300 billion, and the global advertising market will exceed $700 billion.
U.S. Ad spending: According to Magna Global, the U.S. advertising market is set to recover in 2021, with advertising dollars rising year-over-year by about 25% to $284.3 billion.
The main driver of the increase in advertising dollars will be the media that is digital “pure-play” media that will expand by 35% in 2021 to, in total, $162.4 billion, representing 57% of all advertising dollars. That search is the most prominent in the digital segment, with $98.6 billion (+39 percent by 2020) making up more than one-third of all advertising dollars spent in media by 2021. Magna stated that social media could bring in $58.8 billion in advertising spending, which will increase by 36% by 2020. One-fifth of all advertising dollars spent in 2021 will go to social media.
In 2021, the ad budget for all forms of video will be $81.9 billion over the year, which is an increase of 12 percent from 2020. National cable and broadcast will earn $39.9 billion by 2021, increasing 7 percent. Local advertising on video and TV will decrease by 3% to $19.9 billion in an election year. This will be the only video component forecast to show a decline year-over-year. On the other hand, with the help of YouTube and Twitch, pure users (short forms of video) are projected to be +47% and will reach $16.3 billion. Additionally, the Long format AVOD and OTT/CTV platforms are expected to increase by 36%, in line with a substantial increase of +24 percent in 2020. The year-long advertising spending for long-form AVOD and CTT/OTT is expected to total $5.8 billion, the smallest of any video ad-supported platform.
Magna estimates that the ad budget for all audio formats will rise by 25% by 2021, reaching $16.0 billion. The increase in advertising spending is due to streaming and audio on the internet (+68 percent). Likely, as the lockdowns were lifted, ad spending for OOH media bounced back, increased by 14 percent (from 25 percent by 2020), and is predicted to be $7.1 billion. Magna states that OOH growth is driven by roadside billboards (+17 percent) along with street furniture (+11 percentage), however, not transportation (-14). As movies return to theaters, cinema advertising is expected to rise by 53%, boosted by a robust fourth quarter. After a bleak 2020, publishing is expected to increase just 2 percent to $16.6 billion. The increase is led by digital (+18 percent) while traditional print advertising dollars remain in decline at (-12 percent).
When looking at categories of products and their prospects, 2021 is the year in which Magna states that every major product category will boost its advertising spending by 2020, with the most significant increase coming from entertainment, drinks, and retail as technology. Automotive saw an excellent beginning of the year, but spending fell later because of microchip shortages.
The ad market will be helped by 2022 are three cyclical events. The Beijing Winter Olympics three of them are set to commence from February 4 through February 18. The Quadrennial FIFA Men’s World Cup will originate from Qatar and will begin on November 21 and end on the 18th of December. 2022 will be the year of the U.S. midterm elections will be accompanied by a gradual increase in advertising spending across the nation. Election Day will fall on the 8th of November.
Additionally, the factor that could affect your U.S. ad economy in 2022 is the stimulus package, which helped to boost the U.S. economy in 2021, and is less significant in 2022. Another factor to consider involves the supply chain, which is expected to continue until 2022 and cause delays in production for companies such as consumer electronics and automotive, which could affect inflation.
In the year 2022, Magna anticipates continued economic growth for the U.S. The advertising budget for 2022 is expected to grow by 13%, surpassing 300 billion ($320 billion) for the first time. Magna predicts that for 2022, “pure use” online media is expected to open to an increase of 17%, totaling $190 billion. The national TV/video advertising dollars are forecast to remain flat. It is anticipated to see an ongoing substantial increase from long-form AVOD and CTV/OTT (+29 percent) and short-from-video + 27% by 2022. At the same time, traditional national broadcast/cable ad spending is expected to be reduced by 5%.
Magna predicts that audio ads will increase by 6% to $17 billion, aided by digital media platforms (i.e., podcasting). The forecast predicts a rise in radio listening through broadcast since commuting is returning to pre-COVID standards. Print advertising dollars will fall by 1%, even though digital printing increases by 10 percent. Magna predicts that digital print to account for 60% of the advertising dollars in the coming year.
Worldwide Ad Spend Globally, in 2021, ad spending is expected to increase and reach $710 billion, a rise of 22% since 2020. Magna says that the 22 percent will be the most significant growth that has ever been reported, beating the +12.5 percent that was recorded in 2000. Furthermore, global advertising will exceed 700 billion ($709 billion) for the first time as the world economy grows. Looking ahead to 2022, Magna anticipates that growth will grow at +12.0 percent.
For 2021 Magna predicts that global advertising spending to rise by 31.7 percent, with an increase across all 70 countries as double-digit percentage gains in all 68. Apart from those in the U.S., notable increases are expected in major markets, including the UK (+34 percent), Brazil (+30%), Canada (+27%), and Australia (+23 percent). The growth in ad spending will be lower than the average in China (+17 percent) (+17%) and India (+14 percent). Digital media will contribute $441.7 billion of advertising dollars (62 percent), increasing year-over-year by 31.3 percent (compared to +8.6 percent on traditional channels).
U.S. Ad Spend in the U.S., in 2021, Zenith Media expects U.S. advertising expenditure on all media channels to be $285.2 billion, which is an increase of 18.6 percent from $240.3 billion in 2020. Digital media in 2021 will capture $183.1 billion, which is 6,4.2 percent of the total ad dollars allocated. In 2022, Zenith expects to see continued ad spending increase to $320.0 billion, 12.2 percent. Additionally, Zenith forecasts digital media will surpass 200 billion ($214.7) by 2022.
Looking ahead, Zenith expects the U.S. advertising market to expand by another 80 billion dollars by 2024, with the majority of that growth in digital media. Zenith estimates that the U.S. market will continue to grow, accounting for 48% of the overall increase in global advertising spending.
In 2022, social media, with a value of $75.3 billion, will be predicted to be the most significant part of advertising dollars in traditional and digital media, increasing year-over-year by 20 percent. Zenith predicts that more dollars will be devoted to social media by 2022 than on all television. In addition, in 2022, the volume of advertisements on social media will nearly double the amount of money allotted in the pre-pandemic years that was 2019. ($36.8 billion). Zenith predicts that the growth of ads in social media will reach $100 billion by 2024.
The second-biggest digital platform for 2022 will be paid search with $54.3 billion, a rise of 15 percent over 2021. Internet video ranks third in digital media and will earn $41.1 billion by 2022 (+20 percent over 2021), and the display will be followed by $33.9 billion (+15 percent by 2021).
Examining conventional media, Zenith estimates that advertising spending on television will reach $62.4 billion by 2021. It is projected to increase by 4 percent and reach $65.2 billion. In the midterm elections, growth in advertising spending will be excluded from spot television, which is projected to hit $26.0 billion by the end of next year. The development for the other sources of television in 2022 networks ($16.4 billion), cable ($20.4 billion), and syndicating ($2.4 billion) will remain flat.
Cinema, out-of-home, and radio are expected to keep rebounding from the pandemic and slowdown in economic growth. Zenith estimates that local and national advertising for radio in 2022 to increase by 6.6 percent over 2021, and the total amount to be $14.8 billion. In addition, out-of-home media is predicted to grow the amount of advertising spent by 10.5 percent, which will reach $9.2 billion. With the release of more films to cinemas, the cinema’s advertising budget will hit 700 million by 2022. This is an increase of 70 percent. However, despite the growth, Zenith estimates in 2022 that, the advertising budget for out-of-home, cinema, and radio will be lower than the level of pre-pandemic years in 2019.
Ad spending on magazines and newspapers is predicted to continue downward until 2022. Zenith anticipates that advertising expenditure for newspapers to be $7.2 billion by 2022, down from last year’s 10 percent. In the same way, the year-over-year spending on magazines will fall by 9 percent and total $8.2 billion.
Worldwide Ad Spend Zenith estimates that global advertising spending is expected to remain resilient to the pandemic that has spread across the globe. Zenith predicts that in 2021, the global ad market will increase by 15.6 percent, reaching $705 billion, which is more than the total of $634 billion that was in place in the year 2019. Zenith says that advertising spending for all regions worldwide will be significantly higher than pre-pre-pandemic levels for a healthy increase over the next few years. Thus, in 2022, Zenith predicts that the market for ad ads to expand by 9.1 percent to $769.4 billion.
In the future, Zenith expects the global advertising market to expand by 5.7 percent in 2023 and 7.4 percent by 2024. Zenith expects two of the fastest-growing regions from 2021 through 2024 to be derived from Central & Eastern Europe (C&E Europe) and the Middle East & North Africa (MENA). Both regions will see an annual increase of double-digits through 2024.
Zenith notes that the slower pace in the fight against the pandemic resulted in people’s reluctance to shop in shops.
This is why both advertisers and retailers continued their spending on digital media. With a more robust than the expected second quarter of 2021, digital advertising forecasts are expected to grow by 25% throughout 2021, instead of the 19% predicted in the forecast previously released beginning in July. Zenith is also aware that the projections were completed before the Omicron variant was made known.
U.S. Ad Spend according to GroupM, it is estimated that the U.S. ad marketplace in 2021 is predicted to grow for the year by 22.7 percent. If political ads are removed from 2020, the ad increase is expected to be 28.4 percent, making it one of the fastest-growing years in history. It is anticipated that the biggest driver of the growth to come from “pure-play,” the digital medium, which is up 39 percent over the prior year. With a better than the stock market for digital media, GroupM updated its forecast to +29% in June.
In 2021, according to GroupM, digital digits made up 60% of all U.S. ad dollars, increasing from 54 percent in 2020 to 47% in 2019. In the future, GroupM anticipates that digital media to account for 71% of the total ad spending by 2026.
GroupM provides a list of factors that could affect the economy of advertising in 2022. Some of these are supply chains in the form of inflation, data availability for digital media, and the continuing growth of Alphabet, Meta, and Amazon.
Other media influences include the continuing investment in streaming video that affects TV use using streaming video originates from within the U.S. is being distributed across the globe.) This is why GroupM notes that connected TV is now responsible for 24% of television consumption, up from 19 percent in 2020as directly paid TV subscriptions continue to decrease, affecting their reach. Television, however, will remain a viable source for advertisers, and new product categories and new brands can help the medium.
Another revenue source that is a major one is political advertising. GroupM predicts that in the midterm election in the coming year, political ads will be the estimated amount of $7 billion. By 2026, political advertisements will make up more than 15% of television advertisements, up from 10% in 2020.
Global Ad Spend GroupM predicts a global increase in advertising spending in 2021, which is 22.5 percent, an increase from 19.2 percent from the earlier estimate (both exclude U.S. political ad spending). In the same way, GroupM increased its estimates of global ad spending for 2022.
The agency now anticipates growth of 9.7 percent, over 8.8 percent. By 2021, media worldwide (TV and audio, digital platforms, newspapers, magazines, and outdoor and cinema) will bring in $766 billion in advertising spending. Based on new trends, it could reach $1 trillion by 2025. Although revenue growth is expected to be high in the three major market segments, the U.S., China, and the U.K., which will account for around 70% of expansion and about 60% market share, advertising spending growth is expected to be widespread across all 64 markets that are analyzed.
In 2021, the digital media market was projected to increase year-over-year by 30.5 percent. If digital extensions are not included, this medium will491 billion, and an additional 13.5 percent is projected for the following year. If digital extensions have them, global advertising dollars in 2021 will reach $537 billion. In the end, digital media will make up 64.4 percent of all advertising spending in 2021, which is up from 60.5 percent by 2020. It will be 52.1 percent in 2019. GroupM states that excluding China and excluding China, between 80 and 90% of the digital ads will originate directly from Alphabet, Meta, and Amazon.
Comments are closed.