2019 marked a major milestone in the world of advertising. For the first time, digital ad spending in the U.S. exceeded traditional ad spending. 2020 presented yet another milestone – a global pandemic that disrupted human welfare, wreaked havoc on every industry and sent shockwaves to the world’s economy. As a result, the industry saw a decline in 2020 ad spend of -8.8%. Prior to this, the global ad market had been growing for ten consecutive years since the 2009 financial crisis at an average of 4.5% each year.
Our latest report Global Ad Spend Forecasts sheds light on how the industry will rebound in 2021 including the top ten ad spend trends expected, the impact on key markets and industries as well as recommendations for brands to drive growth and good in the year ahead.
Below, we share top findings from our report. For an in-depth read, download the dentsu Global Ad Spend Forecasts report.
Slow but steady global ad spend recovery
2021 global ad spend is expected to remain below the pre-pandemic level of US$600 billion recorded in 2019. However, we do expect global ad spend to recover and exceed this level in 2022 at a growth rate of 6.9% (US$619 billion). While forecasts are dependent on the evolution of the global pandemic, government restrictions and the success of a vaccine rollout, a projected rise in 2021 GDP also indicates a possible recovery of ad spend growth.
Digital continues to prove resilient – from exceeding traditional ad spending in 2019 to hitting another milestone in 2021: reaching half of total ad spend with a 10.1% growth rate. Social (18.3%), search (11.0%) and video (10.8%) are the leading sources of digital growth.
#1 market contributing to ad spend growth in 2021
The top five markets contributing to the projected incremental ad spend growth in 2021 (US$32 billion) are: The United States, China, Japan, the United Kingdom and France. The U.S. continues to be by far the largest ad spend market, accounting for nearly 38% of global spend in 2021—more than the next top four markets combined. The U.S. ad market is forecast to grow by 3.8% in 2021. At US$219 billion, this represents a US$8 billion uplift compared to 2020 and will see the United States contribute a quarter of the new global ad dollars in 2021. Following declining ad spend in 2020, growth is expected to return to the U.S. ad market from Q1 2021.
Which sectors will drive ad spend growth in 2021?
Based on our forecasts across Australia, Brazil, China, France, Germany, Italy, Japan and the United States, it seems that the sectors that restricted advertising spend the most in 2020 are set for the biggest recovery in 2021.
- Travel & Hospitality. Ad spend in travel and transport companies is forecast to grow by almost 30% in 2021, driven by consumers and businesses anticipating a return to restriction-free travel.
- Media & Entertainment. Ad spend in media and entertainment will grow nearly 15%, driven by continued success and expansion of in-home entertainment options and anticipation for out-of-home experiences later in the year.
- Automotive. Automotive advertising is set to grow at nearly 14% as carmakers encourage local travel among consumers.
Brands’ ability to react and adapt to an uncertain environment will continue to be tested next year. Digital will continue to dominate modern marketers’ media mix, but more personalized and channel-specific innovations will be necessary to create brand affinity and growth. Brands will need to secure unique partnerships, commerce strategies and storytelling platforms to integrate to – rather than interrupt – consumer experiences.
For an in-depth read and brand recommendations, download the dentsu Global Ad Spend Forecasts report.