6 ABR 2021

US ADVERTISING MARKET IS EXPECTED TO GROW WITH 2021 ECONOMIC REBOUND

The industry is projected to garner $240 billion, and 10$ billion in revenue, while ad spending is expected to reach 7.25%, a possible 15% year-over-year increases in Q2 this year in comparison to last year's spending.

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Data recently released by Magna and MoffettNathanson indicates that total ad revenues will rise by billions of dollars, and most marketing channels will stabilize to, or grow above, their pre-pandemic normals, the latest Magna Advertising Forecast predicts. "We were always predicting the overall decline of the U.S. market would be moderate,” says one of the report’s author Vincent Letang, executive VP, global market intelligence at Magna. "Not every forecaster was so optimistic at this time last year, but the market eventually proved to be “even more resilient than we thought.”

Magna’s full-year projection for the advertising industry is 2.3 percentage points, equivalent to $10 billion in revenue. Ad spending is expected to reach 7.25%, with possible 15% year-over-year increases in Q2 this year against historically sparse spending in 2020, and as low as 2% in Q4. MoffettNathanson calculated that the AVOD sector will likely account for 35% of total mid-top funnel revenues of $19 billion by the end of 2021. The market's worth is expected to reach$53 billion in 2025, thanks in great part to Youtube, which contributes two-thirds of the figure.

All ad formats are expected to see grwoth this year in comparison to pre-pandemic levels, including social, digital video, and out-of-home media. Digital forms will account for at least two-thirds of all ad sales, growing 13% to $161 billion this year, with Google, Faebook and Amazon as the greatest players, reporting a 17% growth in 2020 to now capture 82% of the market share. Social and search ads account for roughly two-thirds of the digital ad market in 2021.

Other large contributor's to the ad industry's growth will be the US president and Congress partisan control as $8 billion will be spent on political ads, a 75% increase compared to spending in 2016. The 2021 Summer Olympics will net between $800 million and $900 million for national TV ad revenues this year as a result of the 2021 Summer Olympics. Another prominent sporting event is the 2022 Winter Olympics in Beijing six months following the Closing Ceremony in Tokyo.

We were always predicting the overall decline of the U.S. market would be moderate. Not every forecaster was so optimistic at this time last year, but the market eventually proved to be even more resilient than we thought.” Vincent Letang Report Author, Executive VP, Global Market Intelligence, Magna