US advertising growth for 2021 is far exceeding expectations, according to GroupM, leading the media giant to significantly revise upwards its ad spend forecasts for the year.
Delivering an positive prognosis for the advertising industry, GroupM’s mid-year figures show that it now expects a 22% growth in media ad revenue during 2021, a marked improvement on prior forecasts.
The media buyer now predicts 2021 advertising spending to be nearly 15% higher than in 2019.
Advertising growth smashes expectations
A cautious and measured prognosis for the advertising sector has been thrown out the window in GroupM’s latest bout of crystal ball buffing, with an admission that its analysts hadn’t fully anticipated how resilient the economy and advertising market in particular would prove to be.
At the halfway point of 2021, GroupM attributes the digital media sector as the rocket fuel behind a surge in ad spending, which is now expected to hit levels 15% higher than 2019 as companies such as Google, Facebook and Amazon spend with abandon.
The surge in confidence should translate to total media company ad revenue of $279bn in 2021 and accelerate further into the stratosphere from there, reaching $388bn by 2026.
Four areas to watch
As mentioned, digital is knocking it out of the park at the moment with growth now expected to weigh in at 33% in 2021, dwarfing last year’s paltry rate of expansion of just 10%.
Moreover, there is no end in sight to this surge, with times of plenty expected to last until at least 2026, at which point digital will command 69% of the total ad industry.
With all the bright lights shining on digital it’s easy to forget television, but this advertising stalwart is set to remain comparatively stable amid the fireworks, with national TV (including Connected TV+ advertising and linear) expected to clock in at 8.7% growth – a marked improvement on last year’s 6.9% contraction.
Looking further ahead, TV is unlikely to set any pulses racing, however, with a broadly flat outlook for the foreseeable future.
Audio advertising, by contrast, should grow a healthy 25% this year (once again excluding political spending), although this is entirely swallowed up by a 27% collapse last year.
By the close of play, this year audio will still fall 9% below where it stood in 2019 with only incremental recovery expected, despite an explosion of interest in podcasts.
Outdoor advertising meanwhile will post solid 21% growth this year coming off a 27% decline in 2020. Overall the sector is likely to come in 12% below 2019 levels this year, although growth prospects thereafter look strong.