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“Advertising growth is far exceeding previous expectations”: GroupM forecasts $1 trillion+ in 5 years

“COVID has only served as an accelerant … the overall view is one of optimism”

“Midway through 2021, advertising growth for the year is far exceeding previous expectations thanks, in no small part, to the pandemic,” reports GroupM in their Global 2021 Mid-Year Forecast

This has led to a major revision of their global forecast for this year and beyond.

High growth to persist for the foreseeable future

GroupM expects global advertising to grow by 19% (excluding U.S. political advertising) during 2021, a significant upward revision from their December forecast. This represents a level of ad revenue that is 15% higher than 2019. High growth should persist for the foreseeable future, too.

“Many of the factors causing this faster growth were in place pre-pandemic,” notes Brian Wieser, GroupM’s Global President, “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, especially involving manufacturers based in China.”

Looking at individual markets, several should see better than 20% growth, including the U.K., Brazil, China and India. Many others will rise by the high teens, including Canada, Australia and the U.S.  

Most of the improvement in growth reflected in this update belongs to digital media. We now forecast 26% growth for all forms of pure-play digital media.

This Year Next Year: Global 2021 Mid-Year Forecast, GroupM

“The economy is rebounding strongly”

For UK, GroupM expects a 24% growth in media ad revenue during 2021, a marked improvement from their prior forecast.  

With the success of the U.K. vaccine programme and what appears to be relatively limited disruption caused by Brexit so far the economy is rebounding strongly.

U.K. 2021 Mid-Year Forecast, GroupM

In the US, GroupM expects a 22% growth in media ad revenue during 2021, which is also a marked improvement from their prior forecast.  

We didn’t fully appreciate just how much the economy and advertising market might heat up, especially for digital media, until we saw results for the quarter from the likes of Google, Facebook and Amazon (and Snap, Pinterest and others).

U.S. 2021 Mid-Year Forecast, GroupM

“Growth rates in subsequent years, which now extend through 2026, are also incrementally elevated versus our prior forecasts,” says Wieser. “ In total, we estimate that total media company ad revenue will amount to $279 billion in 2021 and rise to $388 billion by 2026.”

One of the biggest revisions in GroupM’s global forecast has been in audio advertising. Expectations for audio were raised significantly, with a forecast now at 18% growth rather than December’s 8.7% level.

Newer forms of radio—particularly podcasting and streaming audio services—help provide some “sizzle” to the medium. Beyond perceptions of podcasting as an appealing format, the sector is improving its commercial potential. Large traditional broadcasters are licensing or acquiring growing numbers of third-party or independent producers or packagers of podcasts along with related technologies. 

This Year Next Year: Global 2021 Mid-Year Forecast, GroupM

Also, while conventional linear TV inventory viewing levels fall, connected TV should continue to grow rapidly, according to the forecast. Growing numbers of advertisers will also look to take advantage of the other capabilities of connected TV, such as addressability and the ability to buy more inventory programmatically. 

Global advertising to exceed $1 trillion in 2026

GroupM’s new forecasts now extend to 2026 and show a compounded annual growth rate (CAGR) of 6.3% between this year and then. In absolute terms, the company now expects global advertising including U.S. political to exceed $1 trillion in 2026, up from $641 billion in 2020 and $522 billion in 2016.

We emphasize that the overall view embedded here is one of optimism.


The report is available for download from GroupM:
This Year Next Year: Global 2021 Mid-Year Forecast