Advertising is a good place to be!

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Excited? You bet! There are new estimates that should bring a smile to all of us who are in the business of offering minds, ears and eyeballs for promotional messages. If you survived 2020 in the business of selling space, airtime and pixels, I have great news for you: Advertising is a good place to be! The worst is behind you. GroupM is the world’s leading media investment company responsible for more than $60B in annual media investment. Their recent mid-​year release of “This Year Next Year,” a biannual report, acknowledges just how much the economy and advertising market are heating up.

Advertising is a good place to be

The midpoint of 2021 finds advertising growth exceeding previous expectations. The study shows 2021 growth to be nearly 15% higher than in 2019. According to the study, this results in a “7.4% compounded annual growth rate (CAGR), despite 2020’s 5.6% decline in underlying U.S. advertising growth. Growth rates in subsequent years, which now extend through 2026, are also incrementally elevated versus our prior forecasts.” GroupM estimates that total media company ad revenue will amount to $279 billion in 2021 and rise to $388 billion by 2026.

Digital will account for 57% of all advertising in 2021, 69% in 2026

Distinctions matter. Definitions of digital have blurred. The study recognizes the fluidity of media: “digital outdoor advertising as out-​of-​home, streaming audio as radio, digital news as newspapers and what we are now calling ‘connected TV+’ as television.” Media providers know this. In the minds of the advertiser, it only accentuates the need to diversify their investment. For those in the media business, this trend heightens the realization that advertising is a good place to be.

Details by format

Television. Newer brands will continue to seek local and national TV. While the focus on streaming TV will reduce inventory, television is still better than the next-​best alternatives. New approaches to manage reach and frequency will happen through linear and connected TV+. Programmatic advertising can help local broadcasters take advantage of national demand.

Audio. Predicted growth of 25% this year. Digital streaming and national network radio should fare well. Podcasting is growing rapidly.

Out-​of-​Home. Technology and luxury categories have a preference for this medium. Cinema is back and shows promise. Year-​on-​year growth estimates for cinema is set at nearly 180%.

Print. Newspapers and magazines add value to marketers' messages but will continue to decline in 2021. It remains to be seen if legislative efforts to empower publishers to negotiate with large digital powerhouses will have a significant impact.

It has been a struggle. Those who have contended with the disaster that was the media business in 2020 have paid their dues. I’m reminded of words attributed to Pearl Jam’s Eddie Vedder, “The best revenge is to live on and prove yourself.” When we consider our pursuits going forward, advertising is a good place to be. To help your clients determine where they should spend their advertising budgets, check out the AudienceSCAN profiles in AdMall by SalesFuel. When they see which ad formats most heavily influence their ideal customers, they'll start spending money with you.

Photo by Hermes Rivera on Unsplash.

Tim Londergan

Tim Londergan

Tim is a research contributor at SalesFuel. Previously, he worked as a Sales Development Manager, representing products such as AdMall and AudienceSCAN. Tim holds a B.S. from the E.W. Scripps School of Journalism at Ohio University.