Digital to power a 10.4% recovery in global ad spend

The future looks bright

• All regions are expected to see increases, with Canada, the US and Australia leading the way as the fastest-growing markets in 2021.

• Overall, five of the top 13 advertising markets are set to recover all ground lost to the pandemic this year; namely Canada, China, Russia, the UK and US.

• The situation has been bolstered by revisions to the precipitous falls logged by the industry in 2020, which are now understood to have been less severe than first feared.

• As such, Dentsu’s January 2021 forecast has now been revised up from -8.8% to -7.2%, although this means 2020 remains the weakest year for advertising since the financial crisis of the late noughties.

Digital drives growth

• Rising digital waters continue to lift all boats, with a modest 4% growth in digital spend last year expected to be eclipsed by a 15.6% growth this year to hit $311bn.

• If these figures play out digital will account for a 50% share of global ad spend.

• Other sectors set to benefit from a new wave of optimism are social, forecast to jump 23%; video, likely to increase by 17%; and search, which could receive a 16.3% boost to reach $110.1bn in 2021.

• The lifting of lockdown restrictions will also translate to an immediate fillip for hard-pressed cinema and out-of-home activity, with growth of 35.1% and 14.6% respectively.

• Positive performances are also expected from radio (10.4%) and TV (7.1%.

• The one fly in the ointment is print, which continues to depress the market as a whole, with a further 4.4% decline.

A summer of sport

• Behind much of the optimism is a return of the sporting calendar with major events such as the UEFA European Football Championships and Tokyo Olympics and Paralympics all playing their part to tempt spend.

• Dentsu anticipates that linear TV ad spend will grow 7.1% to reach $188.4bn while, despite a shift towards internet-based services depressing the linear TV segment below pre-pandemic levels through 2022 and beyond.

Uneven growth

• Government spending underpins much of the present growth spurt although the decimated travel and transport sectors also play their part with an increase of 8.7%.

• Further fuel comes courtesy of media and entertainment (8.9%) and automotive advertising (9.5%).

• Peter Huijboom, global chief executive of media at Dentsu International said: “The shift in consumer behaviour experienced during the pandemic has changed the advertising landscape. Trends we saw developing ahead of 2020 have now become mainstay, such as the shift to digital, e-commerce and the need for greater personalisation in media targeting.

• “Brands need to be increasingly agile and flexible, continuously making informed decisions regarding media channels based on data and insights. Investment in analytics is key and will help to build a view of how behaviours are evolving in future years.“

Methodology

• Figures are drawn from 59 key markets for the biannual report, collated from Dentsu’s brands through to June 2021.

• All figures are converted into US dollars at May 2021 exchange rates.