Is Global Ad Revenue Experiencing Fastest Growth In Advertising History?
The GroupM end-of-year advertising review offers marketers a broad view of ad revenues and trends over the past year and what’s anticipated for the coming year. Here are some highlights from the group’s 2021 report:
- In 2021, digital advertising is on track to grow 31%, and it will comprise 64.4% of all advertising, up from 52.1% in 2019. More than 50 percent of total ad revenue this year came from Alphabet, Amazon, and Meta, outside of China.
- Global advertising revenue is expected to grow at 22.5% for the year 2021, totaling approximately $763 billion.
- Next year will witness strong growth and it is estimated to grow at 9.7%.
The stable growth will continue even after 2021. In a briefing, Brian Wieser, GroupM’s global president of business intelligence said,
“It’s possible that this is the fastest growth in the history of advertising, at least in known history.”
Growth projections for 2021 outstripped GroupM’s midyear projections. He further said,
“We do expect some kind of reversion back toward a normal mid-single-digit growth rate over time, but at very elevated levels. In other words, we’re creating a new plateau for future growth to occur.”
Interesting Read: The Ultimate A-Z Glossary Of Digital Advertising!
The Talking TV
The television marketplace is changing rapidly but the growth is generally flat.
There will be an 11.7% growth in global TV ad spending in 2021, but this will not compensate for the 2020 pandemic-induced shortfall. Reports suggest that the industry won’t rebound to its 2019 levels before 2023. TV advertising will make up 21% of total advertising revenue this year.
A contributing factor to slower growth is that smaller companies find it more difficult to buy television advertising. Historically, television has been used for brand-building, using high-quality video messaging to make a lasting impression on the minds of consumers. However, that can be very expensive for small brands that advertise exclusively online.
No Impact Of Apple Change On The Advertisers
The changes in Apple iOS 14 may have impacted marketers but did not have any adverse effect on digital advertising as a whole. Wieser explained,
“The changes in data do not cause a change in budgets allocated to digital media. We saw this with GDPR—no observable impact at an industry level. Even though the data fidelity is lower now than it might have been before, it doesn’t change the budgets, it doesn’t impact the growth rate. But you never know, things could change.”
Interesting Read: Apple Will Now Ask Permission Before Showing Its Own Targeted Ads
What Lies Ahead For Marketers
GroupM forecasts that Connected TV (CTV) is poised to grow “substantially,” – roughly $17 billion in 2022 and $33 billion by 2026. It saw a surge in audience viewership during the 2020 pandemic. Currently, viewers make up 24% of total TV consumption, which is up from 19% a year ago.
Advertisers who buy ads based on user data, including programmatically, may view this additional inventory as an opportunity to increase revenues. But since three of the most popular streamers—Amazon Prime Video, Disney+, and Netflix—are ad-free and may stay the same in the near future. So, marketers need to come up with some alternate strategies to reach viewers.
Even though the scope of advertising would be harder on TV but marketers should not admit defeat. They should look for new ways to collaborate with the streaming partners. They can capitalize on their brand equity by “connecting their service to the brand in the minds of the consumer.”
Interesting Read: Connected TV Explained: The Essential Glossary Of CTV
