Ad agencies are forecasting bullish growth in ad revenue in 2022 thanks to a greater-than-expected post-pandemic recovery period. 

Even excluding what’s expected to be record-setting midterm election spending in the U.S., the worldwide advertising industry is still expected to enjoy better-than-anticipated growth in 2022 on the heels of what’s been an exceptionally robust revenue year to date, according to GroupM’s latest global end-of-year ad forecast.

The WPP-owned agency calculates that the international ad industry’s growth rate in 2021 will hit 22.5%, versus the 19.2% it previously predicted in June. Come next year, growth is forecasted to continue in the neighborhood of 9.7%, up from a prior forecast of 8.8%, with TV, digital, audio and out-of-home on track to account for $766 billion in total revenue.

“This may be one of the fastest growth rates in the history of advertising,” said Brian Wieser, GroupM’s global president of business intelligence, highlighting an intense post-pandemic recovery period that his mid-year global forecast seems to have underestimated.

See Ad Age’s 2021 Year in Review here.

“In June, I was worried that calling for 20% growth felt very aggressive. And now it turns out that was very conservative,” he said. “The absolute growth we’re talking about is unprecedented.”

Similarly, in Magna's new Global Ad Forecast, the Interpublic Group-owned agency is predicting a 22% worldwide growth in ad revenue this year—up significantly from the 15.1% it forecast in its June report—with the global ad market now 19% bigger than it was pre-pandemic and continuing to grow by at least 12% in 2022

Publicis Groupe’s Zenith also is predicting bullish revenue growth in 2022, suggesting that the global ad industry is on track to see at least 9.1% growth in the coming year, according to a new report. While slightly more conservative than GroupM’s 9.7% figure, it nonetheless reinforces the ad world’s recovery.

Accounting for a portion of this growth is digital media, which continues to enjoy the lion’s share of total ad dollars as more brands and publishers alike fill the space. In fact, GroupM data shows that digital advertising represented 64.5% of all global marketing in 2021, up from 60.5% in 2020; though more than three-quarters of that total comes from just three powerhouse advertisers: Alphabet, Meta and Amazon.

Zenith is now estimating that digital’s year-over-year growth will reach 25% by the end of 2021, revised from its July forecast of 19%. And while digital ad spend growth is expected to slow as the world exits the pandemic, the trend won’t likely stop altogether, with Zenith forecasting 14% growth in the medium worldwide in 2022 and 9% in 2023.

Unsurprisingly, Magna also shows digital advertising enjoyed the fastest growth of any medium this year, with revenues accelerating by 31% to hit $442 billion. Other traditional formats, including linear TV, radio and out-of-home, collectively grew by 9% this year after a dramatic decline in 2020, and have now rebounded to 90% of their 2019 levels.

Wieser, who captained GroupM’s “This Year Next Year” report, also cited three major but less-talked-about trends as contributing factors for the industry’s boom: small companies ramping up their digital marketing efforts; app developers’ and other internet-rooted businesses focusing on “top-line revenue growth”; and China-based marketers who are capitalizing on low-cost international shipping and betting heavy on digital advertising to reach consumers abroad.

The road to recovery

In addition to digital, other media fared positively this year and will continue to do so in 2022, according to GroupM's report. Next year, TV growth will be up by 6.2%, audio by 9.3%, and out-of-home by a whopping 21.8%—though it’s not all rosey. “Print is still in terrible place, audio is not where it wants to be,” Wieser said.

Wieser also cautioned against celebrating this year’s gains too strongly, considering much of the recorded growth is simply a rebound after the industry-wide slides that occurred earlier in the pandemic. “If you’re trying to assess health, it’s best to look where a given medium is in a given country is relative to 2019,” he added.

TV is one of the formats that’s still facing a significant road to recovery. Factoring in the 13.7% downturn the industry faced in 2020, GroupM predicts it won’t rebound to pre-pandemic levels until 2023. Zenith also expects social media to overtake TV in terms of revenue next year, raking in an estimated $177 billion in ad spend versus TV’s $174 billion.

“Brands have been investing more in e-commerce and digital advertising, especially in the latter half of 2021. We expect that this will continue steadily through 2024, resulting in advertising driving more of the global economy’s growth than in years’ past,” said Lauren Hanrahan, CEO of Zenith.

“Social media will perform as one of those key drivers, as audiences continue to shift from traditional TV to social and online video. People still have the same hunger for entertainment, news and content; it’s just how they’re watching it that’s changed,” she said.

For the first time, GroupM looked to show how large advertisers allocate their TV and digital spending. To do that, the agency compared the same advertisers over the same periods to get a consistent picture. 

Isolating TV and digital spending in 10 global markets, the forecast found that the average large brand is allocating 47% of its ad budget to TV, inclusive of digital video extensions, while 35% is being funneled into internet-based media, excluding those digital video extensions. Compare that to 2019, when TV accounted for 48% of the typical budget and digital just 28%.

We’re not so different after all

GroupM’s latest global report consolidates forecasts for individual markets including the U.S., U.K. and China—some of which have received standalone forecasts in previous years—partially because “the narrative isn’t that different” across global ad markets, Wieser said.

Still, while there are many high-level similarities, such as a rise in digital spending and double-digit recovery growth in 2021, it’s also worth noting some stark differences in where different countries’ advertising priorities lie.

GroupM’s report breaks down total ad revenue across seven key media: TV, digital, audio, out-of-home, magazines, newspapers and cinema; as well as in 10 major global ad markets: the U.S., U.K., China, Japan, Canada, Germany, France, Australia, Brazil and India.

The U.S. leads the pack in all seven verticals except outdoor advertising, where it’s second only to China. But beyond that, countries’ placements vary wildly with little consistency across regions or ad formats.

For example, Canada has the lowest total TV ad revenue of all 10 national markets GroupM analyzed, but maintains the second-highest audio revenue behind the U.S.; France outpaces its neighbor Germany in terms of cinema and out-of-home advertising, while revenues in print are higher than almost every other nation; and India has the weakest recorded digital ad revenue in the report, and is yet the fifth-highest in the newspaper column.

On its own, the ad industry’s boom in the U.S. will somewhat mirror global trends, with 22.7% growth largely led by digital expected this year, up significantly from GroupM’s earlier forecast of 17.3% growth. Those figures exclude American political ad spend, which Wieser expects to be in the double-digit billions in 2022, up from the already record-setting cashflow seen during 2020.

“However, excluding the effects of political advertising, we expect underlying growth of 28.4%, which is probably one of the fastest rates of expansion on record,” according to the report.

It was already impressive when trackable election cycle ad spending topped $6 billion during the hard-fought 2020 races, though things are on track to go even higher during the 2022 midterms based on fundraising totals to date, which Wieser pointed to as “the best proxy” for estimating eventual spending totals.

Political fundraising in the first half of 2021 alone was up 84% on a four-year basis and 31% on a two-year basis, he said.