GroupM exec says global ad revenue might be experiencing “fastest growth” in known history

Unlike Spotify, GroupM’s end-of-year advertising review doesn’t tell you which ads you’ve seen or heard the most this year. Not that you’d want that, anyway.

But it does give marketers a broad view of ad-revenue figures and trends from the past year + what’s expected for the year ahead. Some takeaways from its 2021 report, released today:

• Global advertising revenue (not counting US political ads) is expected to grow 22.5% in 2021, totalling approximately $763 billion. Next year, GroupM, owner of media agencies including Mindshare and MediaCom, estimates it’ll grow 9.7%.
• Across the 64 markets GroupM tracks, the median one’s ad revenue is forecast to grow 19.4% this year and 9.1% the next. “In most instances, growth appears especially strong when viewed in comparison to declines in 2020, although two-year growth rates between 2019 and 2021 are also commonly well above historical averages,” the report reads.
• Per GroupM’s estimates, digital ads will make up 64.4% of all advertising in 2021—a pretty big jump from 2019’s 52.1%. Outside of China, the triopoly—Alphabet, Amazon, and Meta—made up more than 50% of total ad revenue this year.

“It’s possible that this is the fastest growth in the history of advertising, at least in known history,” Brian Wieser, GroupM’s global president of business intelligence, said during a briefing. “We do expect some kind of reversion back toward a normal mid-single-digit growth rate over time, but at very elevated levels. In other words, we’re creating a new plateau for future growth to occur.”

An 🍎 change a day doesn’t keep advertisers away

Apple’s iOS 14.5 changes earlier this year have caused plenty of headaches for marketers. But Wieser said the changes haven’t had a material impact on digital advertising revenue as a whole.

“The changes in data do not cause a change in budgets allocated to digital media. We saw this with GDPR—no observable impact at an industry level,” he explained during the briefing. “Even though the data fidelity is lower now than it might have been before, it doesn’t change the budgets, it doesn’t impact the growth rate. But you never know, things could change.”

Talking television 📺

The global TV industry (not including US political ads) will grow 11.7% this year—following last year’s 13.7% dip, per GroupM’s forecasts. The report predicts TV won’t return to “2019 levels until 2023,” and after that, growth will be “generally flat” in most markets. This year, TV will make up 21% of total advertising revenue.

Of course, the bright spot for television is connected TV, which GroupM says is poised to grow “substantially,” raking in roughly $17 billion in 2022 and $33 billion by 2026. But Wieser pointed out that three of the most popular streamers—Amazon Prime Video, Disney+, and Netflix—are ad-free.

“In our view, the ad-free services will basically dominate, increasingly, every market on Earth, maybe outside of China,” he said. “Advertising on television will become a lot harder to come by—the reach potential of television will diminish over time.”—MS