As the year comes to an end, and the realities of living during a pandemic era settle in, advertising dollars spent in the first half of 2021 have seen an incredible 32% growth year over year to $130 billion. And according to a new report from Magna, a media investment and investment company, 2022 is poised to see an even bigger increase in U.S. ad spending, reaching over $300 billion.
How high will U.S. ad spending reach by the end of 2021?
Magna predicts U.S. media owner revenues will grow 23% in 2021 to $278 billion and 12% in 2022, when the market will surpass $300 billion for the first time. By the end of 2021, U.S. ad spending will be 24% higher than it was in 2019.
The recovery was across all major verticals and media types, as advertisers got back into the market after pausing during the COVID-19 pandemic, said Vincent Letang, EVP market intelligence at Magna.
“The rebound was much stronger than anyone expected,” he said. “Cases are up, but whether they are vaccinated or not, people are coming back to their pre-COVID lifestyles. This latest surge, so far, is not threatening to derail the economic recovery.”
Recovery was the most prominent with 50% growth rates in the retail, automotive and restaurant categories, which are starting to open back up. The finance and entertainment verticals have also experienced strong growth.
What media types have grown and will get larger?
Search and social media each grew by 49% year over year in the first half of 2021, while digital audio grew by 51% and digital video pure play by 68%. Growth was driven by large brands returning to the market as well as small businesses, which flocked online to keep their doors open when stores shut during the pandemic.
E‑commerce has been a huge driver of digital U.S. ad spending, as the pandemic “triggered an acceleration in underlying business, lifestyle and consumption trends” that are unlikely to revert back, Letang said. Media consumption habits, driven by the shift to streaming video and the rise of new social platforms such as TikTok, also drove the digital ad spend growth.
But traditional media wasn’t totally left behind, growing 11% year over year thanks in part to the Tokyo Olympics, which, despite a decline in ratings, brought in an incremental $800 million to $900 million for TV overall. For those selling traditional media, don’t forget that the Beijing Olympics are less than four months away and would also be a great opportunity for your advertisers.
Overall, digital is driving much of video’s growth. Cross-platform video grew 20% in the first half of this year, with broadcast media jumping 10%. Meanwhile, spend against ad-supported video on demand on channels such as Hulu grew 41%, and spend against pure-play digital video platforms such as YouTube grew 68% year over year.
Digital is also driving U.S. ad spending growth in audio and out of home, which grew 29% and 2%, respectively, year over year.
What should your advertisers be doing?
Your advertisers will want to be shifting their focus towards digital more now than ever. Whether that be social media, search, mobile, or e‑mail, your clients need to stay ahead of where the U.S. ad spending is headed. And you should emphasize the reach of the digital media formats you sell. A great resource for you is AdMall, powered by SalesFuel. Using our newly refreshed Digital Audit tool will help show your clients where they can improve digitally and ensure their online presence is reaching the right people.
Now that there’s data showing U.S. ad spending is only going to reach new heights in the coming years, your advertisers shouldn’t be afraid to devote resources they normally wouldn’t in the past.
Photo by Mikael Blomkvist from Pexels