Global ad market projected to grow 14% in 2021

Economic recovery lifts all boats

• Underpinning this dramatic shift in sentiment is a global economic recovery, with GDP expected to surge by a surprise 6.4% this year – a major boost to what had been demoralized sectors such as automotive, travel, entertainment, and restaurants.

• The Magna Mediabrands forecast cites further fair weather comes in the form of the return of major international sporting events such as the Tokyo Olympics and the Euros, which are expected to jumpstart spending.

• The upshot of this dramatic bounce is the highest growth rate on record for global all-media advertising spend at 14%, the equivalent of an additional $78bn in spending for 2021, lifting the expected year total to $657bn.

Digital ad formats surge

• Digital ad formats will vacuum up the lion’s share of this largesse with sales up a whopping 20% to $419bn, equivalent to 64% of total ad sales.

• Virtually all digital ad formats will clock in with double-digit rates of growth in 2021 to fuel a surge that should extend into 2022 when the sector will account for two-thirds of all advertising sales.

• Among the chief beneficiaries will be search, with a 20% rise to $200bn, and social media, which is likely to accelerate by as much as 26% to $119bn.

• Elsewhere video ads will grow 24% to $57bn as increased reach and consumption filter through to advertiser wallets.

Linear ad sales not invited to the party

• Away from the popping champagne corks and party streamers, linear ad sales have been left forgotten in the corner with unremarkable growth of 3% for the year, taking its tally to $238bn.

• While the sector still represents the bulk of ad revenues for traditional media owners, their continued stagnation is likely to trigger a wave of consolidations (such as that between WarnerMedia and Discovery) in the media industry to enable it to remain competitive with rising digital stars.

• This suggests that lifestyle changes, new patterns of media consumption and alternate ways of conducting business have permanently undermined traditional sectors such as linear TV and radio, print, OOH and cinema.

• More granular analysis by Magna indicates that linear TV will recover courtesy of a resumption in automotive and drinks advertising coupled with the boon of major international sporting events making their return.

UK leads the way

• Among those leading the way will be the UK, where growth of 17% has been penciled in, outpacing both China (16%) and the US (15%) as major ad markets get back to business more quickly than expected.

• Across the pond, meanwhile, US media companies net advertising revenues are projected to reach a new all-time high of $259bn in 2021, equivalent to an additional $34bn earned over 2020 – with digital advertising to thank once again.

• Report author Vincent Létang, executive vice-president of global market research at Magna, said: “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.

• “At the same time, the acceleration in e-commerce and digital marketing adoption that started during Covid continues full speed into 2021, fueling 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: +14% globally (+15% in the US).”

Methodology

• Magna’s research is based upon the advertising revenues of media owners through analysis of financial reports and data gleaned from media trade organizations.

• With predictions extending out to 2025 across 70 markets, the forecast captures total net media owners ad revenues from national brands as well as local advertisers.