Advertising company Magna Global has raised its US advertising revenue forecast to 23% in 2021 and 12% in 2022 after advertising spending grew 32% in the first half of 2021. In 2022, the US market is expected to reach USD 300 billion for the first time.
According to EVP, Vincent Letang, the growth in advertising spending in the first half was caused by a unique combination of national brands reconnecting with consumers and competing for a limited amount of traditional media inventory. The lasting changes of COVID on lifestyles and marketing methods continued to fuel huge digital advertising spending from both big brands and small businesses.
”These ongoing organic growth engines, combined with Olympic budgets and the Mid-Term election spending, will continue to generate double-digit spending growth in the second half and into 2022.”
Highlights among findings and forecasts:
- All major industry verticals grew ad spending in the first half, with automotive, finance, restaurants and retail showing the largest growth vs. 2020 (+50% or more).
- As a result, the advertising revenues of traditional media owners (incl. long-form video, audio, publishing, OOH) grew by +11% year-over-year while pure-play digital ad formats (incl. search, social, short-form video, digital audio) expanded by +49%.
- Cross-platform video advertising format sales grew by +20% while audio ad formats grew +29%.
- Driven by continued economic strength, Olympic spend, and recovery from some lagging verticals in the second half, full-year ad spend will reach $278 billion this year (+23% vs 2020).
- At the end of 2021, the “COVID Recovery Index” for ad spending will reach 124 overall (24% above pre-COVID levels): index 91 for traditional media owners, index 158 for digital pure players.
- Looking at spending verticals, only four (auto, travel, restaurants, personal care) will remain under index 100 at end-2021 but they will all catch up to pre-COVID levels in 2022.
- A return to normal business conditions for all verticals, a robust macro-economic outlook, and the mid-term election boost will fuel double-digit growth again in 2022: +12%, to reach the $300 billion mark for the first time.