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“The strongest rise in over a decade”: Global ad spend to reach $665 bn this year

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Global economic recovery accelerates: New WARC report shows Q1 2021 growth at 12.5% and Q2 2021 at 23.6%

Global advertising spend is on course for 12.6% growth this year to reach US$665bn, an upgrade from 6.7% initially projected, reports WARC, the international intelligence service. Further growth, of 8.2%, is forecast for 2022, by when the global advertising market will be worth more than US$700bn.

WARC’s latest Global Advertising Trends report: Ad Investment 2021/22 – The Rate of Recovery has just been released. Following an analysis of adspend across 100 markets, WARC has upgraded its annual forecasts as the global ad market rebounds strongly from the COVID-19 downturn of last year. 

Key findings include:

  • Global adspend set to rise by 12.6% this year to reach US$665bn 
  • Global adspend for Q1 2021 grew by 12.5%
  • Global adspend for Q2 2021 grew by 23.6% to US$157.6bn – the strongest Q2 rise in over a decade – driven mostly by online formats
  • At US$311.5bn, global adspend in H1 2021 was 17.8% higher than H1 2020
  • 8.2% growth predicted for 2022

New quarterly research from 100 markets by WARC finds that advertising spend in Q2 2021 rose 23.6% to a total of US$157.6bn – a new high for a second quarter period and the strongest rise in over a decade.

Growth in the second quarter was driven mostly by online formats, which collectively saw spend rise by 31.2% versus the previous year. eCommerce (+59.5%) and search (+50.6%) were star performers, though offline media – most notably linear TV (+11.5%) – also fared well. 

The second quarter rise in global ad trade followed on from 12.5% growth in the first quarter; consequently, at US$311.5bn, global ad investment was 17.8% higher during the first six months of the year than during the same period in 2020. 

COVID-19 accelerated a digital shift in marketing

New research, published today, lays bare the scale of the 2020 ad recession. While total spend fell by 5.4% – approximately half the rate initially estimated – spend on offline media such as print, radio, TV and cinema fell by a fifth, or US$63bn, equating to the worst downturn for this sector in WARC’s 40 years of market monitoring.

Spend online, however, rose by 9.4% ($29.2bn) last year, buoyed by rising eCommerce (+27.4%), social media (+18.3%) and online video (+15.9%) investment.

New quarterly research, collated from 100 markets worldwide, shows for the first time the true extent of the digital shift in response to the coronavirus outbreak last year. Growth in online adspend has typically tracked some 20 percentage points ahead of offline media, but in the final quarter of 2020 this leapt to a remarkable 41 points – an absolute difference of $41bn.

James McDonald, Managing Editor, WARC Data

Online media gained 10 percentage points in budget allocation last year in the automotive and financial categories, a rate of increase that was double the pre-pandemic average. All product sectors are allocating more of their ad budget to online formats than before the pandemic.

Online formats are also leading growth in 2021, with WARC forecasting spend on eCommerce advertising to rise 35.2% this year, mostly to the benefit of Amazon. Brand spend on search – where Google is the largest player – is set to rise by over a quarter (26.2%) this year, while online video spend is expected to be up by 17.7% and social media by 13.1% this year. All of these formats are expected to record growth in 2022, too.

Investment in offline media fell by $63bn worldwide in 2020, marking the worst year in living memory for the majority of media owners. All media are forecast to record growth this year, with most sustaining this into 2022. Yet, as has been seen before, it is the online platforms that are set to benefit most from the ad market’s recovery.

James McDonald, Managing Editor, WARC Data

Trends by media and format 2021/2022

  • Linear TV: Spend is projected to grow 7.1% – or $11.1bn – to $168.1bn this year, equal to a quarter (25.3%) of the global ad market. Investment is expected to rise by a further 2.7% in 2022, though this means only 60% of 2020’s losses will be recovered by 2022. 
  • Out of home: Double-digit growth is expected in both 2021 (17.4%) and 2022 (11.2%) as the medium recovers from the lowest level of investment in over a decade. This year will see $34.9bn being spent and this is set to rise to $38.8bn next year, though this still leaves the market $2.6bn short from 2019’s level of investment.
  • Cinema: Spend was heavily curtailed in 2020 and a strong recovery looks underway. Cinema is forecast to be the fastest growing medium in both 2021 (149.9%) and 2022 (26.9%), taking total investment to $3.4bn next year.
  • Linear radio: Investment in radio ads is projected to increase by double-digits (10.4%) – or $2.5bn – this year. However, spend in 2022 will largely be flat (0.8%) to a total of $26.6bn.
  • Newspapers: Advertising spend on print newspapers will rise by 4.8% this year, the first growth recorded in a decade. This puts the total at $29.6bn, before a mild decline of 1.0% is projected for 2022.
  • Magazines: Investment is expected to rise by a modest 2.5% this year before falling into decline of 4.3% next year. This means magazine brands in 2022 will have recovered just 5% of 2020’s lost advertising revenue.
  • Social media: Social formats, combined, were among the strongest performers in 2020, recording total growth of 18.3% to a total of $99.2bn. Social spend is set to rise by 13.1% in 2021 and a further 10.1% in 2022, by when the market will be worth $123.5bn – approaching a fifth (17.2%) of all advertising spend worldwide.
  • Online video: Online video spend rose 15.9% to reach $54.9bn in 2020. Growth is forecast to accelerate to 17.7% this year, with a rise of 15.9% predicted in 2022.
  • eCommerce: Brand spend on eCommerce platforms leapt 27.4% last year as shoppers migrated online in response to social distancing guidelines. Advertising growth in this sector is now expected to accelerate to over a third (35.2%) in 2021, pushing the market’s value to a total of US$85.2bn. Further growth, of 11.4%, is forecast next year.
  • Paid search: The search market recorded its first decline on record during the second quarter of 2020, though a strong finish to the year meant investment was up by 5.4% during 2020 as a whole. Rapid growth, of 26.2%, is forecast for 2021; the search market grew by a record 50.6% during Q2 2021 alone. Growth will then ease back to 4.3% in 2022, by when the market will be worth $151.9bn, 21.1% of all adspend.

A sample report of WARC’s Global Ad Trends: Ad Investment 2021/22 is available for all here. WARC Data subscribers can read the report in full.