Ad Market Will Grow 5.8% in 2021

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It’s been challenging to stay optimistic during the pandemic and accompanying recession, but the experts say the ad market will grow 5.8% next year. The rest of 2020 holds a few bright spots for your clients. Here are the details.

The Worst is Behind Us

In the U.S., reports Standard Media Index, the ad market experienced declines during the worst of the pandemic as follows:

  • March (-28.8%)
  • April (-33.6%)
  • May (-18.5%)

Overall, researchers measured a 28% drop in advertising in March, April and May in “sophisticated media advertising markets.” This figure includes the U.S. While advertising demand in the travel sector plunged 78% in those three months, pharmaceutical was the sole bright vertical with marketers buying more TV advertising in the U.S.

In addition, the U.S. ad market likely experienced only a 20% drop in June when compared to the same period a year earlier. While this percentage sounds drastic, the general trend is headed in the right direction: up.

For the year, the expected revenue decrease by format breaks out as follows:

  • TV (-11%)
  • Radio (-12%)
  • Out-​of-​home (-25%)
  • Cinema (-51%)
  • Print (-20%)
  • Digital (-2%)

The Power of Politics

Zenith Media analysts are predicting only a 7% drop in total ad revenue in 2020 in the U.S. This loss is slightly better than other ‘sophisticated markets.’ They believe continued spending on political issues and elections will drive ad spending through early November.

The Ad Market Will Grow as Shift to Digital Continues

While political advertising may be one source of revenue for you, don’t overlook the shift to digital. Your clients must be prepared for their digital future. Many of us fixated on our TVs during the early days of the pandemic. Time spent with TV has dropped somewhat recently, but experts believe consumers will continue to stay highly engaged with TV and digital media. That extra time spent with digital is translating to more marketer spending on the format.

On a global basis, marketers will likely spend 51% of their ad budgets on digital formats this year. By 2022, that figure will rise to 54.6%.  We’ve seen the shift to digital happen gradually over the past decade. The pandemic has prompted consumers to more quickly change their purchasing habits. They’ve grown comfortable buying some products online and some of these new purchasing habits are here to stay. The best way for your clients to be more visible to customers is to advertise online.

Give them a snapshot of their digital presence. You can run a Digital Audit on their business at AdMall by SalesFuel. As we move into the second half of 2020, help your clients make the most of their ad budgets by suggesting a revised digital media mix.

Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.