Global advertising to exceed $1 trillion in 2026: GroupM's mid-year TYNY forecast

• GroupM in its mid-year TYNY forecast has said that global advertising is expected to grow by 19% (excluding US political advertising) during 2021, a significant upward revision from expectations held at the time of its prior publication at the end of 2020.
• This represents a level of ad revenue that is 15% higher than 2019, as 2020 only experienced a 3.5% decline on GroupM's revised estimates.
• Television is now expected to grow by 9.3% in 2021 whereas the report now forecasts 26% growth for all forms of pure-play digital media s compared to the 15% at the time of the report's December update.

In what comes as a good news for the global advertising industry, GroupM in its current edition of its annual This Year, Next Year report has significantly raised its global advertising forecasts.

"In total, we expect global advertising to grow by 19% (excluding US political advertising) during 2021, a significant upward revision from expectations we held at the time of our prior publication at the end of 2020. This represents a level of ad revenue that is 15% higher than 2019, as 2020 only experienced a 3.5% decline on our revised estimates. High growth should persist for the foreseeable future, too. Our new forecasts now extend to 2026 and show a compounded annual growth rate (CAGR) of 6.3% between this year and then," the report stated.

The report now expects global advertising, including US political to exceed $1 trillion in 2026, up from $641 billion in 2020 and $522 billion in 2016. Of note, concentration within the industry has increased over this time: in 2020, the top 25 media companies represented 67% of total advertising revenue. That same group of companies accounted for 42% in 2016.

Here are some other highlights from the report:

Concentration within the industry has increased over this time: in 2020, the top 25 media companies represented 67% of total advertising revenue. That same group of companies accounted for 42% in 2016.

Several markets should see better than 20% growth, including the U.K., Brazil, China and India. Many others will rise by the high teens, including Canada, Australia and the U.S.

Here are four areas that were considered:

Digital advertising: The report now forecasts 26% growth for all forms of pure-play digital media versus 15% at the time of our December update.
Expectations for other years are also raised, although to a lesser degree.

Television advertising: Television is now expected to grow by 9.3% in 2021, an improvement from its prior 7.8% expectation.

Beyond this year, the report says it expects low single-digit growth for the broadly defined medium, including what the report calls Connected TV+ (the document has a sidebar that details how we are defining Connected TV+).

The report estimatea that globally Connected TV+ inventory accounted for $16 billion in media company ad revenue, up by 25% over 2020 levels. It anticipates Connected TV+ ad revenue will grow to $31 billion globally by 2026.

Audio advertising: Expectations for audio were raised significantly in this update, with a forecast now at 18% growth rather than December’s 8.7% level.

However, following 2020’s 27% decline, even with these revisions, GroupM do not expect the medium to return to 2019 levels any time soon.

OOH advertising: Outdoor advertising should fare well, growing by 19% in 2021.

Although the TYNY 2021 forecast represents a slightly slower pace of growth than anticipated in December, 2022 expectations are now slightly higher than before.

Longer-term, OOH is benefitting from growing interest in the medium and is aided by new digital formats that allow for incremental sources of demand to emerge.

Print advertising: The report forecasts that newspapers will decline by 0.6% in 2021 and then continue to fall by 3.6% on average from 2021 through 2026. Magazines should decline by 2.2% in 2021, with another 4.9% decline over the next five years.