Let’s not sugarcoat it. 2020 has been pretty brutal on the advertising market. Since the beginning of the year, the global ad market has $63 billion of revenue. After counting for inflation, that decline is double the rate it was during the Great Recession.
The ad market did not feel this battering equally across all categories, though. According to the World Advertising Research Center (WARC), the coronavirus pandemic had a strong negative impact on automotive, retail, travel and transportation ad budgets this year. Traditional media felt the brunt of this:
Cinema ads dropped 46.5% (down $1.5bn)
Out-of-home (OOH) ads dipped 27.3% (down $11.3bn)
Newspapers declined 25.5% (down $9.8bn)
Magazines ad spend fell 25.4% (down $4bn)
Radio ads decreased by 18.4% (down $5.9bn)
But enough of that! 2021 is a new year, one the ad industry has been eagerly awaiting the arrival of for several months. Many organizations have been releasing their forecasts for the year ahead, so let’s take a look at them and break down these predictions.
2021: An Ad Odyssey
Ad markets lost a lot of ground in 2020, so much in fact that WARC predicts it will take at least two years to get back to 2019 figures. Still, they predict that global ad investment will rise by 6.7% next year, meaning 59% of 2020’s losses are expected to be recouped. In North America, the 2021 forecast is even rosier, with the US recouping 89% of its 2020 losses.
With the exception of newspapers and magazines, WARC forecasts the ad spend will see positive growth across all types of media including social media, radio, OOH, cinema online video, TV and search ads. Zenith Media expects Cinema and OOH to have a big year in 2021, in particular, with cinema rebounding by 65% and OOH growing by 16%.
Digital vs. Linear
Digital media channels have certainly been less impacted by depressing ad spending in 2020. Zenith reports that this will be the first year that digital advertising is expected to account for more than half (51%) of total ad spend, and WARC reports online video ad spend actually grew in 2020 by 7.9% and is forecast to grow 12.8% in 2021. Traditional media channels such as OOH, radio, print and linear TV had a pretty tragic year in comparison.
2021 continues the good fortunes digital media is currently experiencing. MAGNA expects most growth in ad markets to come in the form of digital ads, while traditional channels like TV and radio focus on stabilizing post-2020. With nothing impeding future growth in digital advertising, Zenith even predicts that by 2022, digital media will account for 55% of the total ad market.
Several events are expected to help ad markets recover in 2021. The return of live sports is expected to boost ad spend on linear TV, and major events, which were postponed to 2021, will also help networks rebound after so much of the TV and film industries were put on pause in 2020. Zenith predicts that suspended events such as the Summer Olympics and UEFA Euro 2020 football championships will help to fuel ad revenue in 2021.
Our Predictions for 2021?
The Ward Group follows the ad industry closely; we have to if we want to ensure we’re spending our clients’ ad budgets appropriately. While we have high hopes for next year, our media stewards also understand that ad markets are still finding their footing and will be for several more months. To ensure your dollars aren’t wasted and you continue to advertise at the most affordable rates, our media buyers and planners are hard at work preparing for 2021. To get started on your own media plan for next year, contact The Ward Group today.