After a significant fall in 2020, US ad spending in 2021 is expected to jump by 23.3% year-over-year to reach $279 billion (not including political spending). This is according to GroupM’s mid-year forecast report [download page].
GroupM is now much more optimistic than its previous ad industry outlook at the start of the year. Thanks to a healthy Q2, GroupM’s latest forecast estimates that US advertising spending in 2021 will be close to 15% higher than it was in 2019 — years when, according to GroupM, political spend is not a significant factor. Total ad revenue is expected to continue to grow over the coming years, reaching $388 billion by 2026.
In the US overall, GroupM predicts that more than half (57%) of ad spending will go towards pure-play internet channels. Excluding political spend, internet media expenditures are expected to increase by 33.5% y-o-y, totaling $156.6 billion ($157.7 billion including political spending). Driven in part by a boom in e-commerce, internet channels escaped significant declines in ad spend in 2020 and will continue to see revenue growth in the coming years — reaching more than $260 billion by 2026.
Although TV non-political ad spend declined by 10.4% in 2020, and more US households are planning to cut the cord this year, investment is expected to grow by 10.5% y-o-y in 2021, bringing the total to close what it was in 2019. This year TV, including CTV, will account for 23% of total US ad revenue. On its own, CTV will account for about 15% of total TV revenue. By 2026, it is estimated to account for closer to 35% of total TV advertising.
Other traditional forms of media such as print (7%), radio (6%), direct mail (5%) and OOH and cinema (3%) will account for a much smaller share of total ad revenue. However, each is expected to see significant growth after 2020’s sharp declines, though none are expected to fully recover. In fact, even though audio as a whole (including radio) is expected to enjoy 25.3% growth in 2021, its ad revenue will still be 9% lower than in 2019.
Globally, cinema experienced the biggest losses in 2020. The pandemic forced most theaters to close their doors, resulting in an 81.6% y-o-y loss in ad revenue. With the pandemic waning and theaters reopening their doors, the industry is expected to see a 177.8% y-o-y growth in ad revenue this year. Nevertheless, while cinema will see the most significant percentage growth of all platforms this year, GroupM doesn’t expect cinema to reach 2019’s $809.7 billion in revenue again anytime soon. By 2026, cinema is expected to only reach $717.3 billion.
The full report can be read here.