The global prospects for growth in ad spend for 2021 look stronger, according to end of year forecasts by media agency GroupM.
Analysts at the agency have updated the outlook for the 2021 global advertising market to 12.3% growth (excluding US political activity) to almost $US650 billion, up from forecasts made in June of 8.2%.
And the 2020 year will end better than expected, down 5.8%, an improvement on the 11.9% forecasts in June.
The better than expected prospects are based on the resiliency of digital advertising which is expected to grow by 8.2% during the 2020 pandemic year.
GroupM’s forecasts fit with the latest from Zenith which predicts that global ad spend will grow by 5.6% to $US620 billion in 2021. However, spending will remain below the $US634 billion of 2019.
Mark Lollback, GroupM Australia CEO, has a sense of optimism going into 2021.
“Locally we saw the acceleration of trends like eCommerce which has drawn closer ties between marketing activity and purchasing as well as growth in BVOD audiences,” he says.
“Despite the challenges, within the disruption of this year there have been many opportunities to connect with consumers in different ways.
“Understanding the role media channels play overall in delivering objectives and enabling clients to maximise flexibility around consumer consumption trends in the short term, alongside long-term marketing goals are necessary as we move out of 2020.
“If we continue to lean into technology and the talented specialists in our agencies, and work closely with our media partners, we can continue to deliver outcomes for our clients and help drive the Australian economy forward.”
Digital advertising for pure-play media owners such as Amazon, Facebook and Google should be 61% of advertising in 2021.
This share has doubled since 2015 when it was only 30.6%.
GroupM estimates digital advertising will have 66% share globally by 2024.
The forecasts for 2020 and 2021:
Changes ahead
The analysts at GroupM, a media investment company responsible for more than $US63 billion in annual media investment, see significant changes in the media industry ahead.
“Most prominently, e-commerce activities are likely to continue growing from a new, higher plateau rather than reverting to old levels,” says GroupM.
“This has many implications for media budgets, most of which represent an acceleration of existing trends.
“For starters, greater dependence on e-commerce will encourage efforts to directly connect marketing activity with purchasing decisions, leading to greater spending on digital advertising.
“Branding activity on other channels may also increase, assuming there is a demonstrable, beneficial effect on e-commerce for better known brands relative to lesser-known ones.
“Put another way, marketers will likely move their spending away from media or platforms that don’t directly affect their long-term branding or their near-term performance goals. We are, of course, mindful that determining effectiveness remains largely subjective.
“Additionally, marketers not primarily oriented around digital, or those that don’t have national or global footprints, will likely emerge weaker after the pandemic. This would contribute to weakness in certain media, especially print and radio, in many markets around the world.”
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.