The global advertising market is breaking new records and surpassing the pre-COVID period
According to the latest MAGNA report, Mediabrands, a global source of data on media markets, we are facing a growth of the global advertising market, which in some regions will surpass investments before the Covid-19 virus pandemic.
GLOBAL ADVERTISING MARKET INCREASES + 22%
The global economy has recovered in line with expectations (GDP + 5.9% vs. + 6.4% expected in April), and in most markets both marketing activity and investment in advertising are on the rise. Growth was particularly strong in countries where vaccination against COVID arrived fast and enabled the reopening of businesses at the beginning of the year: USA + 6.0%, Great Britain + 6.8%, France + 6.3%. By comparison, some other large markets have shown a slight economic recovery, due to insufficient vaccination and long-standing constraints on COVID and / or the manufacturing sector crippled by supply chain problems: Japan + 2.4%, Germany + 3.1%. Around the world, consumers have spent more money using “forced savings” as soon as restrictions on movement are removed in the spring or summer. In this environment, national brands and local companies competed to be the first or most effective in reconnecting with consumers. In addition, spending on advertisements has benefited from international sporting events (Summer Olympics, UEFA Euro Football Tournament).
Global investment in advertising in all media increased by almost + 22% and reached a new record of 710 billion US dollars. Coming after the closure and encouraged by giant government stimulus packages, it was always expected to show record growth in 2021, but again, this growth is greater than the expected recovery.
Several of the world’s largest markets recorded above-average growth including the US (+ 25%), the UK (+ 34%), Brazil (+ 30%), Canada (+ 27%) and Australia (+ 23%), while China (+17) %) and India (+ 14%) recorded below average growth.
Revenues from advertising in traditional formats (TV, radio, OOH, press, cinema) increased by 21 billion US dollars (+ 9%) after falling by -17% in 2020 and reached 268 billion US dollars; this puts traditional formats at 90% of the market size before COVID (2019).
The US market recorded a growth of + 25% in 2021 and reached 284 billion US dollars, with sales of digital ads + 37%, while sales of traditional media ads increased by + 8%. In 2022, economic growth (GDP + 3.9%) and consumption will continue to drive ad sales, despite supply chain problems slowing some verticals in the first half. The market will grow by + 13% (digital + 18%, traditional media + 4%) and will cross $ 300 billion for the first time, to reach a new all-time record of $ 320 billion.
ADVERTISING IN THE MARKETS OF CENTRAL AND EASTERN (CEE) EUROPE
Revenues from television advertising grew by + 10.5% in 2021 and reached $ 7 billion, representing 33% of the total advertising market in the CEE Europe region. The TV market had high ratings in 2021, primarily due to events such as the Tokyo Olympics that increased TV spending in certain markets (e.g., betting, finance, drinks and technology). The UEFA Euro Football Tournament was also a major driver in 2021, with matches hosted in Hungary, Romania and Russia, as well as many CEE European teams qualifying for the tournament (Russia, Poland, Hungary, Ukraine, the Czech Republic, Slovakia). Croatia and Turkey), which all contributed to the increased viewership in these countries.
Digital advertising formats have increased by + 35% in 2021 in SEE Europe, which is significant after the slowdown of + 8% in 2020. Digital formats now account for 62% of total advertising sales worldwide.
Mobile advertising grew by + 46% and reached $ 9 billion (over 70% of total digital budgets). Digital growth was driven by social media (+ 42%), search engines (+ 38%) and digital video formats (+ 41%).
Print advertising is declining in the SEE Europe region, and while COVID has accelerated the decline in print advertising spending, extremely low growth in 2020 means that print advertising rose slightly (+ 2.2%) in 2021. This represents a lump sum effect for both newspapers and magazines, the best growth effect since 2008. However, the press then accounted for 24% of total budgets, compared to today, when it represents only 3% of the budget. It is predicted that by 2026, print advertising will represent only 2% of the budget.
Spending on radio advertising rose by + 13.6% this year, jumping slightly after the -22% disaster in 2020, but still remained 12% lower than in 2019. Quarantine-related car downtime reductions did not help radio, and many consumers still work from home.
OOH recorded a huge growth this year (+ 22%). However, unlike digital advertising formats, the growth is entirely due to weak OOH advertising in 2020.
Finally, cinema was hit hardest of all ad formats during the COVID crisis, falling -54%, and continuing to decline in 2021 due to a slower recovery from COVID.
It is predicted that in 2022, the markets in the SEE region of Europe will grow and increase by + 6.6% per year by 2026. The total market will reach 30.6 billion dollars by 2026, which is significantly more than in 2019.
Russia remains the largest market in the SEE region of Europe, accounting for 40% of total advertising spending. It is followed by Poland, the Czech Republic and Turkey, which together account for an additional 34% of total spending. All markets in the region will grow in 2021, and the strongest growth rates will be in Turkey (+ 35%), Ukraine (+ 26% amid strong economic inflation), Latvia (+ 23.5%) and Hungary (+ 22%). Slower growth will be in Kazakhstan (+ 19%), Serbia (+ 16%) and Croatia (+ 14%).
CENTRAL AND EASTERN (CE) EUROPE MARKETS – Forecasts for the South East Europe (SEE) Region
“The countries of the SEE region, aided by strong advertising growth rates in 2021 as well as optimistic predictions for 2022, continue to dominate TV advertising markets with over 50% television share in total investment. The share of TV investments in total investments is even higher in smaller markets such as Bosnia and Herzegovina, Northern Macedonia, Montenegro, Albania… On the other hand, the share of digital media is constantly increasing in all markets. The coronavirus pandemic has further accelerated the growth of digital advertising, and in 2022 double-digit growth is expected in the markets of the SEE region (former Yugoslavia, Bulgaria and Albania), says Predrag Guberinic, SEE Regional Chief Trading Officer I&F Mediabrands.
This year, the Serbian advertising market grew by + 16.4% and reached 145 million euros (165 million US dollars). This growth brings it slightly above what was achieved in 2019 (143 million euros). Serbia’s GDP grew by + 6.7% on a real basis. It is predicted that the advertising market in Serbia will continue to grow in 2022 (+8.2).
The Croatian advertising market fell by -11.8% in 2020, to 1.4 billion kuna (US $ 206 million), as the Croatian economy shrank by -12% on a real basis, which is far, worse than the overall average in CI Europe. In 2021, the Croatian advertising economy recovered by + 14.2%, recovering losses from 2019. In 2022, Croatian advertising revenue will increase by another 5.4%, with growth of 12% in digital and 2.5% in linear formats.
The Slovenian advertising market grew by + 16% in 2021 and reached 196 million euros (223 million US dollars). Slovenia’s GDP has recovered significantly this year (+ 10.8% on a nominal basis), as consumers have slowly returned to their established consumer habits.
The Bulgarian advertising market grew by + 17% this year, reaching BGN 597 million (US $ 348 million). This follows a performance of -5.0% in 2020, so that growth in 2021 more than offset losses in advertising spending during the COVID crisis. Bulgaria’s GDP grew by + 14% this year on a real basis, following a weak result in 2020 (-10.8%). In 2022, advertising revenue will increase by another 10.2%, with growth of 23.2% in digital formats and 3.9% in linear formats. After 2022, digital advertising will continue to outperform linear formats, accounting for 40% of total budgets in Bulgaria by 2024, compared to 33% this year in 2021, while linear formats will stagnate starting in 2023 and slowly begin to decline.
For more than 60 years, MAGNA has been setting an industry standard by predicting the future of media investment and publishing over 40 reports a year on trends related to media consumption, advertising investment, market demand, and ad effectiveness.