Statistical Analysis of the Impact of Covid-19 on Marketing and Advertising

Q1 of 2021

The UK ad market is expected to register the second highest growth rate in 2021.

The Dentsu’s Ad Spend Report 2021 projects the UK ad sector to attain the second-highest growth rate in 2022 in the global ad market. Dentsu has forecasted a strong year-on-year recovery growth of 10.4% in the UK ad market in 2021.

According to the projections, only India’s ad industry is expected to perform better than UK ad market, with a growth estimate of +10.8% in 2021. Other countries such as France, Canada and Italy will record a decent growth in the ad markets with rates of 8.9%, 7.2% and 5.9% respectively in the same year.

The USA is expected to continue its dominance on the aggregate share of the global ad spend, which may account for 37.9% of the total value. In the same report, the UK is ranked in fourth position with a modest share of 5.1%, behind China and Japan at 17.6% and 9.9% respectively.

In the coming year, the greatest challenge for advertisers will be understanding, predicting and distinguishing temporary consumer habits from the permanent ones. Nonetheless, the big brands in the world economy are optimistic that social, search and video will greatly drive growth in the ad sector, notwithstanding the global economic uncertainty in the initial six months.

The best advertising agencies provide fair predictions on growth of the global ad market in 2021.

Towards the end of 2020, Forbes gathered market predictions from the best three advertising agencies, that is, Magna, Zenith and GroupM, to determine the growth potential of the international ad market in 2021.

The general consensus among the opinion shapers in the ad market indicate that digital advertising will perform much better than traditional advertising methods. Cinema advertising is anticipated to make a comeback this year, on the basis that some regions have rolled out expansive vaccination plans, and lifted restrictions to return to normalcy.

Sports advertising will also receive a huge boost as the Tokyo Olympic event, whose planning was delayed in the previous year, is expected to get back on track soon.

According to Magna, there are strong expectations for the global spend on ads to increase by 7.6% in 2021, recording a total of $612 billion. The agency also expects to see a 10.4% growth in digital media and a 3.5% growth in linear media (even though it is a $42 billion loss from 2019).

Magna expects India to record a year-on-year growth rate of26.9%, making it the country with the highest ad spend growth globally.

As per Zenith, the international ad spend value will hit the $634 billion mark in 2020, which is lower compared to the total spend in 2019. Additionally, in the coming years, Zenith expects the global ad spend to increase by 5.2% in 2020 and clock the $652 billion mark.

Following conclusion of the 2020 election, USA’s total spend in the ad sector is expected to grow by a paltry 3.3%, with regions like Latin America and the Middle East/North Africa having a higher growth rate prediction of 10 to 11%.

Arguably, GroupM is the agency with the most expectant 2021 growth outlook for the global ad market. This agency is forecasting an increase in the total ad spend to reach $651 billion, with the largest growth contributions coming from in Latin America and APAC at a rate of 24.4% and 14.1% respectively.

GroupM expects the growth rate in digital media to be 14.1%, reaching the $396.8 billion mark, which, comparatively is much higher than Magna’s estimates.

2021 Projected UK Ad Spend Growth Revised Down

According to statistics provided in the recent WARC Expenditure Report/Advertising Association, the recovery of the ad market spend in the UK in the coming year may be lesser than earlier projected. For this reason, UK ad sector’s earlier estimate of a return-to-growth rate of 16.6% in 2021 (as announced in back in July) was reviewed downwards to 14.4%.

The total ad spend for the entire 2020 is expected to decline by 14.5% from the previous year, and settle at the £21.5 billion mark, representing a £3.6 billion loss compared to 2019. This is despite the sector’s performance in the Q4 relying on festive advertising to counteract the sector’s poor performance for that year. Nonetheless, we can expect a decline of 10.5% in ad spend in the final quarter of the year, compared to a similar period a year before.

To cope with increased demand, some companies are doing external marketing reviews to kickstart their marketing activity.

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