The rebound in global advertising this year has accelerated well beyond earlier expectations, leading to a massive upgrade to Magna's 2021 global advertising spending forecast.
Whereas last fall Magna, the intelligence unit of IPG's Mediabrands, predicted a 7.6% global rebound in 2021, that figure has now been upgraded to record-high growth rate of 13.5%, or $78 bilion, en route to an all-time high of $657 billion in ad spending this year. Such growth stands in stark contrast to the -2.5% decline seen in 2020.
North America saw the largest 2021 forecast upgrade from 4.2% in Magna's Fall 2020 outlook to 14.9% in this current Spring 2021 forecast, followed by Latin America's 6.6% upgrade to a similar 14.8% growth rate for this year. The APAC market, which will grow by 12.8% to reach $203 billion, saw the least change from Magna's earlier forecast, but all regions around the globe saw upward revisions.
Magna attributes the sharp turnaround to the global economic recovery which is seeing activity to return to many Covid-affected verticals like automotive, entertainment, restaurants and even travel, alongside the return of key global sporting events like the Tokyo Olympics and UEFA Euro.
Of this spending, digital advertising continues to see the most growth, with Magna doubling its earlier forecast of 10% to 20% digital growth this year to $419 billion, representing 64% of total ad sales. Linear ad sales will continue to stablilise with $238 billion in predicted spend, but now at a slower growth rate of 3.1%.
All of the 70 ad markets monitored by Magna are set to expand this year, with the largest gains coming to some of the world's biggest markets, namely the UK (16.8%), China (16.1%) and the US (15.1%).
“As economic recovery is stronger and faster than anticipated in several of the world’s largest ad markets (US, UK and China, in particular) and consumption accelerates, brands need to reconnect with consumers," says Vincent Létang, EVP, Global Market Research at Magna and author of the report. "At the same time, the acceleration in ecommerce and digital marketing adoption that started during COVID, continues full speed into 2021, fueling digital advertising spending from consumer brands as well as small and DTC businesses. This unique combination of cyclical, organic and structural drivers will lead to the strongest advertising annual growth ever monitored by Magna."
While these record growth trajectories are unlikely to persist beyond this rebound year in 2021, Magna still predicts healthy global ad spend growth of 6.6% again next year, with all but one market expecting single-digit growth. India, which was hardest hit by the pandemic last year, is the only ad market forecast to see double-digit growth (13.6%) in 2022.
(This article first appeared on CampaignAsia.com)