As the U.S. gets back on track following a disastrous 2020, so will the country’s advertising industry. Total ad revenues will rise by billions of dollars, and most marketing channels will stabilize to, or grow above, their pre-pandemic normals, the latest Magna Advertising Forecast predicts.
Buoyed by a long-term decline in COVID-19 cases, President Biden’s trillion-dollar stimulus package, and a return to regular sports programming, the advertising industry’s total 2021 revenues are set to increase 6.4% to $240 billion, according to Magna’s new report, released today. That outlook is 2.3 percentage points stronger than the company projected in its previous forecast from December 2020.
Excluding one-off spending surrounding events such as last year’s political cycle and the upcoming Summer Olympics in Tokyo, the normalized growth rate for ad revenues this year would be even more significant at 8.6%.
“We were always predicting the overall decline of the U.S. market would be moderate,” says the report’s author Vincent Letang, executive VP, global market intelligence at Magna. Not every forecaster was so optimistic at this time last year, he says, but the market eventually proved to be “even more resilient than we thought.”
Total ad spend inclusive of cyclical events is simultaneously poised to jump this year by an average of 7.25%; broken down by fiscal quarter, the year-over-year increases may be as high as 15% in Q2 this year against historically sparse spending in 2020, and as low as 2% in Q4, thanks to last year’s major political and holiday spending.
This year’s strongest ad spending will come from verticals such as travel, automotive, drinks and entertainment—categories that saw sweeping ad budget cuts last year as consumer demand all but disappeared in the wake of the coronavirus pandemic. Other verticals’ spending growth may not be as robust through 2021, but the silver lining is that few, if any, categories will see a decline this year, Letang says.