How much is the advertising industry worth? Dentsu analysts expect the U.S. ad market to grow by 3.8% in 2020. Globally, cinema and digital will register strong gains. Newspapers and magazines will suffer single-digit declines and their anticipated revenue losses have worsened since Dentsu’s last projection. However, radio and TV will eke out small gains.
Growth in the U.S.
While some analysts expect the U.S. ad market to grow by 3.8%, Dentsu is looking for a 3.3% increase on a global basis. Interest in the U.S. elections, the NFL and the summer Olympics will be the sources of growth. When analysts ask how much the advertising industry is worth, they should remember the extra cyclical revenue will increase media company bottom lines by $8.5 billion this year. Globally, marketers will add $23.3 billion in additional revenue.
As other research shops have pointed out, marketers will continue to flock to mobile. They expect their digital ads to be noticed by more consumers who watch their screens relentlessly. Their additional investment in mobile search and display is the result of expecting more consumers to make purchases on their smartphones. In fact, 75% of digital ad spending will go to mobile devices.
Outlook for 2021
After the excitement of the elections and Olympics fades, the ad market growth in 2021 will amount to 2.8% in the U.S. The slowing growth rate will impact some formats significantly. Globally, the projections for newspapers (-10.2%) and magazines (-11.5%) are sobering.
The lofty earlier projections for out-of-home from Denstu analysts, 2019 at 4.3% and 2020 at 3.9%, were revised to 1.5% and 2.4%, respectively. For 2021, analysts have pegged the out-of-home growth rate globally at 2.5%. Analysts believe that new technology, such as VR and facial recognition, are partially responsible for driving interest in out-of-home.
Digital growth will lose a bit more of its shine, dropping to 9.5% in 2021 after potentially hitting 10.5% this year. The market will also see some shifts, according to WARC. Companies with significant ad market share include Google (23%), Facebook (13%) and Amazon (2.5%).
And growth by verticals will change this year as well. Look for financial services companies to increase spending by 23%. Retailers, however, will only allocate another 2.4% to ad spending.
If you’re working with clients in these verticals, talk with them about planned changes in advertising. They may ask how much the advertising industry is worth to them. Remind them that consumers who see their messages will be motivated to buy their products and services. Review the industry-specific information in the local account intelligence reports in AdMall from SalesFuel. You can also use the Presentations tool, with a subscription to PRO, to give your clients all the information they need to buy advertising and services from you.