July 5, 2022

Global Ad Spending Expected to Rebound Faster Than Previously Forecast

After a reversal last year, global ad spending is forecast to snap back from the pandemic even faster than previously predicted, GroupM said in its latest forecast.

Worldwide advertising revenue will jump 19% to $749 billion in 2021, excluding U.S. political advertising, said GroupM, which houses the media-buying agencies and data operations of ad giant

WPP

PLC. In December, the company had predicted a 12% increase for this year. Last year, global ad spending slipped 3.5% to $628 billion.

For 2021, however, revenue will grow 24% in the U.K. and Brazil, 23% in China and 17% in the U.S., including political advertising.

In a separate report last week that focused exclusively on the U.S., GroupM said ad spending will grow 22% this year, excluding political advertising. That figure included direct mail and directories that were removed from calculations in the global forecast.

GroupM chalked up much of the expected growth this year to the acceleration of digital advertising, which will shoot forward 26% this year, the company estimated, a pace up sharply from its December forecast of 15%.

That move higher reflects more ad revenue at digital behemoths like

Amazon.com Inc.,

Alphabet Inc.’s

Google and

Facebook Inc.

in the first quarter, as well as greater insights into a flurry of digital companies that opened their books to the public as they listed stock, said

Brian Wieser,

global president of business intelligence at GroupM.

“New evidence in the form of Q1 numbers showed us that these trends were playing out at an even faster pace than we anticipated,” Mr. Wieser said.

Multinational and international marketers, such as Chinese companies spending abroad, are also accelerating digital ad spending, he added.

Since late last year, advertisers have been ratcheting up their spending at digital media companies to reach consumers who are growing used to shopping and devouring content and TV online.

An increase in the number of small businesses launched during the pandemic—many of them digital-only—is likely also fueling the growth in virtual ad spending, as those companies are more likely to invest in their online operations and ads instead of bricks and mortar, according to the report.

Alibaba was one of the top five ad sellers last year, along with Google, Facebook, Amazon and ByteDance.



Photo:

alex plavevski/Shutterstock

The connected TV category will also benefit from the changing consumption habits, GroupM said in its report. Global ad spending in connected TV is on track to grow 25% to $16 billion this year, and will reach $31 billion globally by 2026, according to the report. The company defines connected TV ads as those delivered to a TV through an internet connection, including video-on-demand and delivery to other devices, and excludes the category from its digital advertising figures.

An increase in streaming and digital products from the world’s ad-selling giants is making it possible for brands to execute more global ad deals with fewer players, said Mr. Wieser.

Last year, the top five ad sellers—Google, Facebook, Amazon, Alibaba and ByteDance—generated $296 billion in ad revenue, or 46% of global ad spending, according to the report.

Ten years earlier, the top five ad sellers—Google; Viacom and CBS;

News Corp.

and Fox;

Comcast,

and

Disney

—collected only 17% of global ad spending, GroupM said. Viacom was combined with CBS, and News Corp. with Fox in GroupM’s calculations to reflect common controlling ownership.

“At the time, most of the industry’s largest companies only had a minimal global presence in terms of their ad sales operations,” the report said, referring to the largest sellers 10 years ago. “By contrast, today, the largest sellers of advertising are either focused primarily on China or have a significant presence in most countries on the planet.”

The trend will likely continue as media companies add platforms and streaming services to pull in global audiences, said Mr. Wieser.

As the big U.S.-based media companies expand their direct-to-consumer services—for instance, ad-supported streaming products—around the world, they are going to be able to sell ads in various markets where advertisers historically worked with local media companies, Mr. Wieser added.

“That’s a new thing,” he said. “This global concentration is going to continue.”

To be sure, pandemic-related difficulties could hamper the ad industry’s recovery, according to the report, which cited risks such as inflation, which could lead a company to rethink its budget allocations. There are also concerns around the Tokyo Olympics and advertisers’ campaigns for it as Japan continues to struggle with high rates of Covid-19 infection.

Write to Alexandra Bruell at [email protected]

Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Related Posts

Jobs for the City of Tomorrow

June 7, 2021

June 7, 2021

The Future of Everything covers the innovation and technology transforming the way we live, work and play, with monthly issues...

Tesla Recalls Over 285,000 Vehicles in China, Most of Them Locally Made

June 26, 2021

June 26, 2021

Tesla Inc. TSLA -1.17% is recalling more than 285,000 passenger vehicles in China—including more than 90% of locally made vehicles...

Amazon Seeks Recusal of FTC Chairwoman Lina Khan in Antitrust Investigations of Company

June 30, 2021

June 30, 2021

WASHINGTON— Amazon.com Inc. filed a request with the Federal Trade Commission seeking the recusal of new Chairwoman Lina Khan from...

Nielsen Invests in New TV Ratings Platform After Selling $2.4 Billion Unit

May 24, 2021

May 24, 2021

Nielsen Holdings PLC’s finance chief Linda Zukauckas is allocating funds to a new TV ratings platform after the sale of...

Why a Grand Plan to Vaccinate the World Against Covid Unraveled

May 26, 2021

May 26, 2021

This spring, American epidemiologist Seth Berkley had to break some bad news to the world’s poorest countries: millions of Covid-19...

Drought’s Toll on U.S. Agriculture Points to Even-Higher Food Prices

July 1, 2021

July 1, 2021

The Southwest is suffering through one of its worst droughts on record amid a critical reduction in the amount of...

Millions of J&J Covid-19 Vaccines Are at Risk of Expiring in June

June 8, 2021

June 8, 2021

Hospitals, state health departments and the federal government are racing to decide how to use up millions of Johnson &...

U.S. Housing Market Booms, but Small Contractors Miss Out

June 26, 2021

June 26, 2021

Some small contractors say they are missing out on the U.S. housing boom as shortages of workers and supplies in...

How Nike Handled Scandals Through the Years

May 29, 2021

May 29, 2021

The sneaker giant cut ties with Neymar and Lance Armstrong and stood by Kobe Bryant and Tiger Woods.

U.S. Hog Prices Sink as China Rebuilds Herd

June 29, 2021

June 29, 2021

Prices for hogs in the U.S. are tumbling in the wake of China’s announcement that the country’s herds have recovered...

Troubled Companies Take Page From AMC Playbook in Seeking Stock-Market Lifelines

June 20, 2021

June 20, 2021

The frenzied stock-buying activity that may have saved AMC Entertainment Holdings Inc. from bankruptcy is opening up a potential escape...

Japanese Business Leaders Add to Chorus Against Holding Olympics

May 24, 2021

May 24, 2021

TOKYO—Opposition to the Tokyo Olympics opening in two months has deepened in Japan and spread to some prominent business leaders...

Biden Policies Would Help Unwind Destructive Forces of Inequality, Climate Change, Yellen Says

June 16, 2021

June 16, 2021

Treasury Secretary Janet Yellen is set to testify before the Senate Finance Committee on Wednesday. Photo: Jacquelyn Martin/Associated Press June...

United Airlines Bets on Post-Pandemic Growth With Its Biggest Ever Jet Order

June 29, 2021

June 29, 2021

United Airlines Holdings Inc. is making its largest ever plane order, adding Boeing and Airbus jets to fuel its post-pandemic...

Microsoft’s Bing Temporarily Blocked Searches of Tiananmen Square ‘Tank Man’ Image

June 4, 2021

June 4, 2021

Searches for the image known as ‘Tank Man’ were temporarily blocked on Microsoft’s Bing search engine on Friday, the anniversary...