According to two ad industry forecasts released on Monday, the global advertising industry will grow faster this year than previously expected, as brands rely more heavily on search engine and social media companies such as Alphabet Inc’s Google and Meta Platforms Inc to reach customers during the pandemic.
Despite a year marked by global supply chain disruptions that delayed products reaching shelves and an Apple Inc user privacy crackdown that many feared would disrupt mobile advertising, brands have continued to advertise online as in-store shopping has been slow to return due to the ongoing pandemic, according to Jonathan Barnard, director of global intelligence at advertising firm Zenith, which published an ad expenditure forecast on Monday.
According to Brian Wieser, global head of business intelligence at ad agency GroupM, new firms founded during the epidemic needed to promote to get customers, while others presumably maintained marketing spending to stay in front of consumers’ thoughts.
GroupM predicted a 22.5 percent increase in worldwide ad spending in 2021 over the previous year, while Zenith predicted a 15.6 percent increase — both projections were revised upwards from previous forecasts.
According to the predictions, global ad spending is predicted to rise by roughly 9% in 2022.
The surge has benefited major digital ad vendors Alphabet, Meta, and Amazon.com Inc, who now account for more than half of all advertising spending outside of China, up from around 40% in 2019, according to GroupM.
It also comes as Alphabet and Meta, the business that used to be known as Facebook, are both under investigation for antitrust violations in the US and Europe.
Because of the necessity for marketers to reach consumers directly, merchants such as Walmart, Target, and Kroger have been able to rapidly build their own ad sales businesses, allowing brands to target more customers using their shopper data. According to Zenith, this type of advertising surged 47 percent this year to $77 billion, and is anticipated to grow to $143 billion by 2024.
Retail media networks have been around for more than a decade in China, but their growth in other areas has been extraordinary, according to Barnard.
“In the last five years, it has grown explosively out of nowhere outside of China,” he said.