Midway through 2021, advertising growth for the year is far exceeding previous expectations thanks, in no small part,Â to the pandemic. This has led to a major revision of ourÂ globalÂ forecast for this year and beyond.Â
Many of the factors causing this faster growth were in place pre-pandemic, but COVID has only served as an accelerant. These include faster than expected expansions of app ecosystems, rapid small business formation activities and the growing role of cross-border media marketplaces, especiallyÂ involving manufacturers based in China.
Other changes are taking root as well. Traditional TV network owners areÂ prioritizing investments inÂ content delivered on streaming services. WhileÂ many of them will offer some ad inventory and capture aÂ share of total TVÂ advertising, those gains will only offset reduced spending on the traditionalÂ form of theÂ medium.
Consequently, we see faster growth in Connected TV+Â advertising (what we previously calledÂ âdigital extensions of traditional TVâ)Â than previously forecast, but total television advertising willÂ generally beÂ stable orÂ slow-growing.Â Â
In total, we expect globalÂ advertising to grow by 19% (excluding U.S. political advertising) duringÂ 2021, a significant upward revision fromÂ our December forecast. This represents a levelÂ of ad revenue that is 15% higher than 2019, as 2020 only experienced aÂ 3.5% decline on our revised estimates. High growth should persist forÂ the foreseeable future, too.Â Â Â
We now expect global advertising including U.S.Â political to exceed $1 trillion in 2026, up from $641 billion in 2020Â and $522 billion in 2016. Of note, concentration within the industryÂ has increased over this time: in 2020, the top 25 media companiesÂ represented 67% of total advertising revenue. That same group ofÂ companies accounted for 42% in 2016.Â Â
Looking at individual markets, several should see better than 20% growth, including the U.K., Brazil,Â ChinaÂ and India.Â Many others will rise by the high teens, including Canada,Â AustraliaÂ and the U.S.Â Â Â
Most ofÂ the improvement in growth reflected in this updateÂ belongs to digital media. We now forecast 26%Â growth for all formsÂ of pure-play digital media versus 15% at the time of our DecemberÂ update.Â Â
Here areÂ some other areas considered in detailÂ as we reach the halfway point of 2021:Â
- Television advertising:â¯Television is now expected to grow by 9.3% in 2021, an improvement from our prior 7.8% expectation.â¯Â
- Beyond this year, we expect low single-digit growth for the broadly defined medium, including what we call Connected TV+â¯(the document has a sidebar that details how we are defining Connected TV+).Â
- We estimate that globally Connected TV+ inventory accounted for $16 billion in media company ad revenue, up by 25% over 2020 levels. We anticipate Connected TV+ ad revenue will grow to $31 billion globally by 2026.Â
- TVâsÂ unique reach advantage is set to erode at a relativelyÂ rapid pace in the near term as investments in ad-free or ad-lightÂ streaming video servicesâmostly U.S.-basedâdominate the globalÂ industry going forward. By spending billions of dollars on contentÂ (see ourÂ sidebarÂ onÂ Global Streaming Video for more on this).Â
- Audio advertising:â¯Expectations for audio were raised significantly in this update,Â with a forecast now at 18% growth rather than Decemberâs 8.7% level.â¯Â
- However, following the 2020s 27% decline, even with these revisions, we do not expect the medium to return to 2019 levels any time soon.Â
- OOH advertising:â¯Outdoor advertising should fare well, growing by 19% in 2021.â¯Â
- Although our 2021 forecast represents a slightly slower pace of growth than we anticipated in December 2022 expectations are now slightly higher than before.â¯Â
- Longer-term, OOH is benefitting from growing interest in the medium and is aided by new digital formats that allow for incremental sources of demand to emerge.