Advertising Market Keeps Growing Much Faster Than Expected, Forecasters Say

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According to Zenith, e-commerce is proving to be a boon for digital advertising

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Those figures are above GroupM’s forecast of 19.2% growth and total ad spend of $749 billion in June of this year. In December, the company had predicted 12% growth for this year.

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The report comes as digital advertising is growing particularly fast.

Digital advertising will account for 64.4% of total advertising in 2021, GroupM said, up from 60.5% of total advertising in 2020 and 52.1% in 2019.

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Somewhere between 80% to 90% of digital advertising outside China will go to Google parent Alphabet Inc.,

Facebook parent Meta Platforms Inc. and Amazon.com Inc.,

GroupM estimates.

“The growth rate of advertising in general, and digital in particular, is much faster than we estimated in June,” said Brian Weiser, global president of business intelligence at GroupM.

This growth is due to more spending on digital advertising by digital companies such as small businesses and app developers. China-based marketers are also increasingly using global digital platforms to reach overseas consumers.

An increasing share of digital advertising is flowing through display or search advertising displayed on retailers’ e-commerce platforms, according to another new forecast, from Zenith, part of advertising holding company Publicis Groupe.,

Many consumer-facing businesses, including retailer Walmart Inc.,

Healthcare Company CVS Health Corporation

and food-ordering and delivery platform DoorDash Inc.,

Offering advertisers more ways to reach consumers by using stored data on shoppers’ purchases. Zenith estimates that media advertising with retailers will grow 47% in 2021 to reach $77 billion globally. This segment comes after growing 24% in 2019 and 53% in 2020.

A big chunk of that figure is coming from Amazon, said Jonathan Barnard, head of Zenith. Amazon doesn’t break out ad revenue in its earnings report. The company said its “others” segment, which is primarily made up of advertising, brought in more than $8 billion in revenue for the quarter ended Sept. 30.

“There are certainly retailers that are picking up on this trend and starting to sell more ads in the last 18 months. But the main part of this money is Amazon, as well as the various Chinese e-commerce networks,” Mr. Barnard said.

Zenith also predicts that global social-media advertising will overtake television ad spend next year. The firm expects social-media advertising spending to reach $177 billion in 2022, with previous TV commercials estimated at $174 billion. The pandemic’s lift to e-commerce also accelerated marketers’ shift to social-media advertising.

“We may have got there, but we got there early,” said Mr. Barnard.

Megan Graham at [email protected]

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