#Ad spending expected to hit new highs post-COVID

The advertising market is poised for a major rebound as the pandemic wanes, according to a new report.

US advertising sales are expected to hit a new all-time high of $259 billion this year — up 12.5 percent — while global advertising spending is seen hitting a record $657 billion this year — up 14 percent, according to the latest forecast from media investment and intelligence company Magna.

“As economic recovery is stronger and faster than anticipated in several of the world’s largest ad markets, US, UK and China, in particular, and consumption accelerates, brands need to reconnect with consumers,” said Vincent Létang, MAGNA’s executive vice president of global market research.

The exec pointed to an acceleration in ecommerce, digital marketing and the marquee events like the Tokyo Summer Olympics, which will drive ad spending this year.

The anticipated global ad gain of $78 billion in 2021 follows a dip of 2.5 percent in 2020, the report said, estimating that the marketplace will grow 7 percent in 2022 due to marquee events like the Winter Olympics, as well as the return to normalcy post-pandemic.

Magna said advertising growth is fueled by the overall economic recovery, which saw global gross domestic product rise 6.4 percent in the first quarter of 2021. Industries like automotive, travel, entertainment and restaurants have experienced a resurgence thanks to international sports events like the upcoming Olympics and European Football Championship.

The US ad gain of $34 billion this year is predicted to be lifted by gains in digital ad sales, which are expected to jump 20 percent.

Magna also addressed the massive consolidation across the media industry, which is turning to mergers in the face of declining television and print ad sales amid rising digital and streaming ad sales.

In the TV world that push has led to a flurry of M&A activity with the most recent merger between Discovery and AT&T’s WarnerMedia as a prime example.

Since that deal, Discover/ WarnerMedia, NBC and ViacomCBS are the top three TV ad vendors, “will control just 60 percent of the US TV ad market,” Magna said. That group will also only control 15 percent of the broader, cross-platform ad market, of which Google controls 30 percent and Facebook controls 16 percent.

Traditional media companies “have no choice but to grow in scale,” in order to compete, the report said, adding that more M&A is on the horizon in US markets as a result.