Ad Revenue Will Grow 22% in 2021, GroupM Projects

A year ago, the industry was seeing the results of several months of lockdown, and it was looking at a 10% drop in spending for 2020, ending nearly a decade of growth. Compared to last year, and even six months ago, the outlook for the industry is in much better shape, so finds GroupM’s latest midyear forecast. Excluding political spending, the WPP media group’s “This Year Next Year” midyear forecast expects a 22% growth in media ad revenue during 2021, with 2021 advertising spending expected to be nearly 15% higher than in 2019. GroupM estimates that total media company ad revenue will amount to $279 billion in 2021 and rise to $388 billion by 2026. That’s certainly a rosier outlook than the end-of-year forecast of just six months ago. "Our new forecasts show that the media industry has a significant capacity for growth," Brian Wieser, GroupM's global president, business intelligence, told Adweek. "It is presently benefitting from the economy’s ongoing process of creative destruction, drawing in significant volumes of new sources of spending from different kinds of marketers, especially including what we call 'digital endemics,' manufacturers based abroad but targeting consumers in the U.S. and small businesses, who themselves are forming at a rapid pace." The midyear forecast states that GroupM didn’t fully appreciate just how much the economy and advertising market might heat up, especially for digital media, until the results for the first quarter from the likes of Amazon, Facebook, Google, Pinterest, Snap and others came in. Now, the media investment company expects that digital advertising (excluding political) will grow by 33% in 2021, building on last year’s rate of expansion. At that pace, digital will account for 57% of all advertising in the U.S. In addition, by 2026 digital will continue to drive and even outpace the overall market, accounting for 69% of the industry. Other findings from the midyear forecast: Television advertising is set to remain relatively stable following a year of recovery-driven growth, with flat trends and incremental shifts out of TV by large traditional brands offset by incremental spending by newer ones.National TV—including connected TV+ advertising and linear forms of the medium—is expected to grow by 8.7%, a full recovery from 2020’s 6.9% decline.Audio-based media should grow 25% this year (excluding political), although this comes off a 27% decline last year. Combined, the medium should end 2021 nearly 9% below 2019 levels. After some incremental recovery next year, GroupM expects stability beyond 2022.Podcasting is also clearly growing rapidly and probably drawing incremental dollars from digital media.Outdoor advertising will look similar to audio in 2021—21% growth this year appears solid, though it comes off a 27% decline in 2020.Combined, 2021 out-of-home advertising will likely be around 12% below 2019 levels. Unlike audio, GroupM expects outdoor advertising to enjoy ongoing growth beyond next year, as advertisers in several key categories—especially technology and luxury—exhibit strong preferences for the medium. Growth in 2021 could be offset by some other negative trends, including the ongoing shortage of semiconductors that is causing a wide range of industries to shut down or slow production, and the possibility that the Tokyo Olympic Games could still be canceled. An Olympics cancelation would significantly affect the U.S. advertising market, where well over $1 billion in advertising budgets are typically dedicated to the games. The forecast expects most marketers to continue with their third-quarter media campaigns, even with a cancelation, but limited ad inventory, especially on television, could lead to the cancellation of some media spending. GroupM Continues Diversity Drive With Media Inclusion Initiative

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Ad Revenue Will Grow 22% in 2021, GroupM Projects

GroupM's midyear forecast shows a big upturn compared to last year

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Kyle O’Brien