Zenith: Global Ad Spend Returns to Pre-pandemic Performance

By Larissa Faw 

With global ad spend exceeding pre-pandemic peaks by 6% in 2021, the U.S. is projected to lead the way to supply 48% of these new ad dollars, according to Zenith’s latest Advertising Expenditures report. Advertising spend is predicted to total $669 billion, $40 billion more than was spent before the pandemic in 2019.

The major players are back. In addition to the U.S. adding $67 billion to the global ad market this year, China will contribute 11%, with Japan and the UK adding 6% each.

Much of this new money comes from small businesses that have had to pivot rapidly to ecommerce platforms to survive lockdowns, and from budgets that brands would previously have allocated to retailers to secure physical shelf-space, which they are now spending on display and search ads on retailer websites.

Now, the shift to ecommerce will slow down as Covid-19 restrictions begin to lift, but Zenith firmly believes the industry will not go into reverse. Ecommerce will continue to pull in incremental revenues to the ad market, driving 13% growth in social media and 12% growth in search in 2022, it said in its report.

“Growth in North America is being driven by the very rapid pace of digital transformation in its industries, as well as strong investment in connected TV and advertising-funded video-on-demand,” Jonathan Barnard, head of forecasting/director global intelligence, Zenith.

Digital advertising is to take 58% share of market in 2021, up from 48% in 2019. Social media advertising will expand by 25% to reach $137 billion—overtaking paid search in scale for the first time—while paid search will expand by 19% to reach $135 billion.

Meanwhile, other categories are not as popular. Traditional static display is forecast to shrink by 15% this year, while online classified will grow by just 4%.

Radio advertising, which shrank by 22% in 2020, is forecast to grow by 4% in 2021, while television fell 8% in 2020 and is forecast to grow 1% in 2021. Print will continue its long decline, now in its 14th consecutive year, with an 8% drop in ad spend in 2021.

In 2023, ad spend in all these media will still be below 2019 levels—though cinema and out-of-home will have made up almost all of their lost ground.

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