Zenith Media Projects Significant Rebound in Advertising Spend

In total, overall digital advertising will grow 19% in 2021 to a 58% share of ad spend. While almost all digital ad apertures are showing strong growth, legacy narrowband models such as static banners are set to contract by 15%. In 2021, online video advertising will be the fastest growing digital channel (+26%), reaching revenue of $63B. Social media revenue is expected to be up 25% and will outpace spending in search for the first time. By 2023, the report projects out that, for the first time, globally ad spend on social media will outpace ad spend on TV -- a milestone in the digital era.

MediaVillage spoke with Zenith's Head of Forecasting, Jonathan Barnard, about the impact of the Delta Variant and which insights really stood out. Despite the Delta Variant spikes and a return to indoor masking, as well as continued lockdowns in certain global markets, he is confident in the forecasts.

"The concerns were mounting (of another COVID-19 spike) while we were finalizing the report," Barnard said. "However, the report fairly reflects our current opinion. There are risks on the downside, but also reasons to be even more positive than the report currently reflects. Our forecasts, especially in comparison to our contemporaries are relatively restrained and at the lower end of expectations. Delta hasn't changed our forecast, yet."

The report provides a detailed look at advertising expenditure (both in local currency and U.S. dollars) from 2009 projections through 2023 for over 80 markets: providing a breakdown by medium (newspaper, magazine, TV, radio, cinema, out-of-home and internet). One of the things that stands out, according to Barnard, is the resiliency of the U.S. market. "I was surprised by the strength of the advertising sector by the end of last year and how quickly parts of it had bounced back," he said.

According to the forecast, total advertising revenue spend in the U.S. in 2021 ($271.6B) will surpass pre-pandemic ad spend from 2019 ($242.5B). Globally, the U.S. will account for 46% of the $67B of new ad spend this year. China will account for 11%, Japan and the U.K. for 6% each.

Much of what is driving the strong growth in ad spend, according to Barnard, is new money into the arena from the SMB market. The pandemic forced small-medium local businesses to get scrappy and more savvy to keep their business afloat through the pandemic. They learned how to use digital platforms, which, Barnard noted, "you can see reflected in the latest financial results from companies like Alphabet (Google/YouTube), Snap and Facebook."

With movie theaters closed and lockdowns keeping workers from commuting, cinema and OOH were two of the hardest hit media in 2020. Ad spend on those media types fell 72% and 28%, respectively, last year. Both are projected to recover in 2021, with cinema projected to grow 116% and OOH 16%. Barnard attributes the slower recovery of OOH in 2021 to the fact that commuting back to offices is not expected to truly begin until late in the year, around October. Both media types are not expected to reach pre-pandemic spend levels until after 2023.

The full study, Zenith's Advertising Expenditure Forecasts - July 2021, is available for purchase.

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