Magna US advt report predicts double digit growth for OOH in 2021
By M4G Bureau - April 01, 2021
Overall non-political linear ad sales (TV, radio, print, OOH) will grow by +1% to $77 billion.
Magna US launches its annual advertising report for 2021 predicting a positive growth for the industry. As per the report, advertising revenues will increase by +6.4% to $240 billion. The normalized growth rate would be +8.6% if the industry neutralizes for the impact of cyclical ad spending – generated by elections and Olympics – in both years. That is 2.3 percentage points above the previous MAGNA forecast (published Dec. 2020) due to a stronger economic outlook, supported by the new stimulus package, well-pacing COVID decline, and a return to normal sports events.
Improving business conditions are expected to fuel marketing expenditures and allow most industry verticals to grow advertising spending again. The strongest ad spend growth rates will come from Travel, Automotive, Drinks, and Movies, following heavy ad budget cuts in 2020.
Most advertising channels and formats will stabilize or grow ad revenues in 2021, with double-digit growth expected from social media, digital video, search and out-of-home, and low to mid-single-digit growth for national TV and radio. Overall non-political linear ad sales (TV, radio, print, OOH) will grow by +1% to $77 billion (incl. cyclical spending), while digital ad sales (search, social, video, display, audio) will grow by +13% to $161 billion. Digital ad formats will capture two thirds (67%) of total advertising sales for the first time.
Total advertising (linear+digital) decreased during only one quarter in 2020 (Q2 2020) compared to nine consecutive quarters in 2007-2009. Linear ad spend is suffering just as much as did 11 years ago, but spending is expected to grow again in 2Q21 after four negative quarters compared to 11 consecutive quarters during the great recession.
According to Vincent Letang, EVP, Global Market Intelligence, MAGNA, and author of the report: “Our final estimate for US advertising revenues in 2020 confirms that digital marketing was not only resilient but thrived in the COVID, as the organic growth factors all accelerated (shift to ecommerce, digital media consumption, small business adoption etc.) Meanwhile, upper-funnel marketing budget, including branding ad campaigns suffered just as much as in the previous recession. The latest economic and business outlook for 2021 gives us confidence that most industry verticals will grow ad spend again, up and down the funnel, and that will benefit nearly all media channels this year”.