Global End-of-Year Forecast that shows a much faster expansion in the advertising industry than previously anticipated, driven primarily by growth in the US, UK, and China.
Some of the key factors causing faster-than-expected growth:
- New small businesses allocating greater resources to nationally oriented digital advertising
- China-based marketers capitalizing on low-cost international shipping and using global digital platforms to reach overseas consumers
- App developers or other “digital endemic” businesses rooted in the internet economy, many of which focused on advertising-driven top-line revenue growth
Here’s the overall industry forecast:
- 2021 growth: 22.5% (excluding U.S. political advertising), an upward revision from June’s prediction of 19.2%.
- 2022 growth: 9.7% (excluding U.S. political advertising), an upward revision from June’s prediction of 8.8%.
- Many underlying trends appear to be disproportionately concentrated in the U.S., the U.K. and China, which together account for approximately 70% of all the industry’s growth, despite making up about 60% of the total market.
- Looking at the top 10 advertising markets over the next five years, growth should get back to the mid- to high-single digits:
- France, Germany, Australia and the U.S. all poised to grow in a range of 4-5% annually, on average, over the next five years.
- India, the U.K., Brazil, Canada, Japan and China are forecast to grow between 6-8% annually, on average.
Here are the major areas considered in detail as we reach the end of 2021:
- Digital advertising: likely end 2021 growing by 30.5%, up from June’s forecast of 26% growth.
- Digital advertising accounted for 64.4% of all advertising in 2021, up from 60.5% in 2020.
- Alphabet, Meta and Amazon account for 80-90% of the global total.
- Television advertising: forecasted to grow by 11.7% in 2021, up from June’s estimate of 9.3%. Given 2020’s decline of 13.7%, the industry is not expected to return to 2019 levels until 2023.
- Subsequent years will be roughly flat—up 1-2% per year through 2026—for television advertising in most major markets around the world, as the largest advertisers continue to incrementally shift spending.
- Overall, Connected TV+ will account for about 10% of total TV advertising in 2022 ($17 billion of a total of $171 billion) and is expected to double by 2026.
- Audio advertising: Expectations for audio are that it will grow 15.6% in 2021 and 6.4% in 2022. In subsequent years, we assume a reversion to historical trends: largely flat.
- OOH advertising: Outdoor advertising is expected to grow 17.1% in 2021 and 14.9% in 2022. In subsequent years, we assume a reversion to historical trends: mid-single digit growth.
