Three prominent global ad agencies (Magna, Zenith and GroupM) recently issued their final forecast for the ad marketplace in 2021 and a look at 2022. Forecast were provided for both the U.S. and global markets. In 2021 the ad marketplace was driven by digital media, specifically social, search and video which was more robust than anticipated midyear. While there are several factors to consider, strong ad spending growth is expected to continue in 2022. The U.S. ad market is forecast to exceed $300 billion and the global ad market over $700 billion.
U.S. Ad Spending: According to Magna Global, the U.S. ad market will rebound in 2021 with ad dollars growing year-over-year by an estimated 25%, totaling $284.3 billion.
Driving the growth in ad dollars will be digital “pure play” media which will grow by 35% in 2021 and total $162.4 billion, accounting for 57% of total ad dollars. Among digital segments, search will lead with $98.6 billion, (+39% from 2020) accounting for over one-third of all ad dollars invested in media in 2021. Magna reported social media will generate $58.8 billion in ad spend, increasing by 36% from 2020, one-fifth of all ad dollars spent in 2021 will be allocated to social media.
For 2021, ad spending for all video will come in at $81.9 billion for the year, an increase of 12% from 2020. National broadcast and cable television will generate $39.9 billion in 2021, an increase of 7%. In a non-political year local TV/video ad spending will drop 3% to $19.9 billion. It will be the only video segment forecast with year-over-year declines. On the other hand, led by YouTube and Twitch, pure players (short form video) is forecast to be +47% reaching $16.3 billion. In addition, long form AVOD and OTT/CTV devices is projected for +36%, following a strong year-over-year +24% in 2020. For the year, ad spending for long form AVOD and CTT/OTT will total $5.8 billion, the lowest of any ad supported video platform.
Magna estimates ad spending for total audio will increase by 25% in 2021 reaching $16.0 billion. The ad spending growth will come from podcasting and digital audio (+68%). As expected, with lockdowns rescinded ad spending for out-of-home media bounced back increasing by 14% (from -25% in 2020) and is projected to total $7.1 billion. Magna notes OOH growth will be driven by roadside billboards (+17%) and street furniture (+11%), but not transit (-14). With movies back in theaters, cinema advertising will increase by 53%, led by a strong fourth quarter. After a miserable 2020, publishing will show a modest uptick of +2% at $16.6 billion, the growth will be driven by digital (+18%) as traditional print ad dollars continue their freefall at (-12%).