Three giants taking up to 90% of digital advertising market

Three giants taking up to 90% of digital advertising market

Three giants will account for up to 90% of the digital advertising market in 2021. Google owner Alphabet, Meta, earlier Facebook and Amazon account for 80-90% of the global total, advertising company GroupM Global says in a forecast. The median advertising market is expected to grow by 19.4% in 2021 and 9.1% in 2022.

”As we reach the end of 2021, advertising growth is showing much faster expansion than previously anticipated, driven primarily by growth in the U.S., U.K. and China.”

”Among the 64 territories we track, we expect the median one to expand by 19.4% in 2021 and 9.1% in 2022. In most instances, growth appears especially strong when viewed in comparison to declines in 2020, although two-year growth rates between 2019 and 2021 are also commonly well above historical averages.”
”As such, our industry-wide expectation for global advertising in 2021 now calls for a growth rate of 22.5% versus 19.2% previously (both figures exclude U.S. political advertising). Likewise, 2022 is poised to grow faster than we predicted in June: We now forecast global growth of 9.7% versus 8.8% previously.”

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TV, digital platforms, audio, newspapers and magazines, cinema and outdoor media will collectively account for USD 766 billion in ad revenue. Combined, they should exceed USD 1 trillion in revenue during 2025 based on GroupM´s new estimates.

”Looking at the top 10 advertising markets over the next five years, growth should get back to the mid- to high-single digits, with France, Germany, Australia and the U.S. all poised to grow in a range of 4-5% annually, on average, over the next five years, while markets including India, the U.K., Brazil, Canada, Japan and China are forecast to grow between 6-8% annually, on average.”

Key factors causing faster than expected growth in the forecast:

  • New small businesses allocating greater resources to nationally oriented digital advertising.
  • China-based marketers capitalizing on low-cost international shipping and using global digital platforms to reach overseas consumers.
  • App developers or other “digital endemic” businesses rooted in the internet economy, many of which focused on advertising-driven top-line revenue growth.

Developments in major areas at the end of 2021:

  • Digital advertising: likely end 2021 growing by 30.5%, up from June’s forecast of 26% growth.
    • Digital advertising accounted for 64.4% of all advertising in 2021, up from 60.5% in 2020.
    • Alphabet, Meta and Amazon account for 80-90% of the global total.
  • Television advertising: forecasted to grow by 11.7% in 2021, up from June’s estimate of 9.3%. Given 2020’s decline of 13.7%, the industry is not expected to return to 2019 levels until 2023.
    • Subsequent years will be roughly flat—up 1-2% per year through 2026—for television advertising in most major markets around the world, as the largest advertisers continue to incrementally shift spending.
    • Overall, Connected TV+ will account for about 10% of total TV advertising in 2022 ($17 billion of a total of $171 billion) and is expected to double by 2026.
  • Audio advertising: Expectations for audio are that it will grow 15.6% in 2021 and 6.4% in 2022. In subsequent years, we assume a reversion to historical trends: largely flat.
  • OOH advertising: Outdoor advertising is expected to grow 17.1% in 2021 and 14.9% in 2022. In subsequent years, we assume a reversion to historical trends: mid-single-digit growth.
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