Magna’s global ad market forecast predicts a record 13.5% growth in ad spending in 2021 to a record high of $657 billion, led by strong growth in the United Kingdom, China and the United States.
The rise in global advertising has accelerated much faster this year than previously expected, leading to a significant increase in Magna’s global ad spending forecast for 2021. While Magna, the analytics arm of IPG’s Mediabrands, projected a 7.6% global lift in 2021 last fall, that figure has now been raised to a record high growth rate of 13.5%, or $78 billion, on track to reach a record high of $657 billion in ad spending this year. This growth contrasts sharply with the -2.5% decline seen in 2020. The largest growth in the 2021 forecast was in North America, from 4.2% in Magna’s fall 2020 forecast to 14.9% in the current spring 2021 forecast, followed by Latin America, up 6.6% to a similar 14.8% growth this year. The APAC market, which will grow 12.8% to $203 billion, has undergone the smallest change from Magna’s previous forecast, but all regions of the world have seen an upward revision.
Magna attributes this sharp turnaround to the global economic recovery, which is bringing activity back to many Covid-hit verticals such as automotive, entertainment, restaurants and even travel, along with the return of key global sporting events such as the Tokyo Olympics and the UEFA Euro. Of this spending, digital advertising continues to see the most growth, with Magna doubling its previous forecast for digital advertising growth of 10%-20% this year to $419 billion, representing 64% of total ad sales. Linear advertising sales will continue to stabilize with projected spending of $238 billion, but now at a slower growth rate of 3.1%. All 70 advertising markets tracked by Magna will grow this year, with the biggest gains coming from some of the world’s largest markets, namely the United Kingdom (16.8%), China (16.1%) and the United States (15.1%).
“As the economic recovery is stronger and faster than expected in several of the world’s largest advertising markets (particularly the U.S., U.K. and China) and consumption is accelerating, brands need to reconnect with consumers,” says Vincent Letang, EVP of Global Market Research at Magna and author of the report. “At the same time, the acceleration of e-commerce and digital marketing adoption that began during COVID continues full steam ahead in 2021, fueling digital ad spending by consumer brands and small and DTC businesses. This unique combination of cyclical, organic and structural factors will result in the strongest annual ad growth in Magna’s monitoring history.” While these record growth trajectories are unlikely to persist beyond this year’s recovery in 2021, Magna still forecasts healthy global ad spending growth of 6.6% next year, with all but one market expected to grow in single digits. India, which was hit hardest by the pandemic last year, is the only advertising market where double-digit growth (13.6%) is projected for 2022.
