Zenith: Alcohol's 2021 Global Ad Spend To Rise 5.3%, Digital Growing At TV's Expense

The reopening of bars and restaurants will help drive alcohol ad spend in the U.S. and 11 other key markets up 5.3% in 2021, outpacing anticipated 4.9% growth for the ad market as a whole, per new projections from media buying agency Zenith.

Alcohol spending in those markets, which account for 73% of total global ad spend, dropped 11.6% last year, compared to a 6.4% decrease in overall ad spend.

As consumers drank less alcohol and shifted to buying alcohol at retail, at much lower margins than in hospitality venues, brands sought to protect their margins by sharply reducing their marketing.

As a result, ad spend in the category, including beer and spirits, dropped from $7.6 billion in 2019 to $6.7 billion in 2020, according to Zenith’s Business Intelligence – Alcohol: Beer + Spirits report.



Even with 2021’s higher-than-average gain, the rebound will be slow. Category spending will remain 8% below 2019’s level by the end of 2021, reaching $7 billion. In 2022 and 2023, category spend will grow roughly in line with the market, at 4% to 5%. Spending will finally slightly exceed 2019 levels by year-end 2023, at $7.7 billion.

“The alcohol industry has suffered more from the pandemic than most, and that was reflected in the steep drop in ad spend last year,” summed up Jonathan Barnard, head of forecasting at Zenith. “The recovery won’t be as dramatic as the downturn, but investment in digital communication will drive steady growth in alcohol advertising for the next few years.”

Alcohol brands normally spend twice as much on television as the average brand — allocating 49% of their budgets to television in 2020, compared to 24% for the average brand, for example.

But the closure of hospitality venues forced alcohol brands to shift emphasis to direct-to-consumer sales, causing them to rethink their historically low commitments to digital advertising, and invest in owned online assets including brand websites that “replicate the brand experience” and educational content, says Zenith.

Alcohol brands increased their spending on digital media — especially social media — from 21% of budgets in 2019 to 24% in 2020.

The category’s digital spend is forecast to grow at 9.2% annually between 2019 and 2023, and account for 30% of category ad spend by 2023.

At the same time, category spending on TV, which had already become less effective at reaching young-adult audiences in addition to losing overall reach, will decline by 2.4% annually.

However, the category, which has always spent heavily on out-of-home — allocating 19% of budgets to OOH in 2020, versus 5% average for brands overall — will continue to increase that investment.

OOH advertising is projected to grow 1.1% a year, even taking into account the pandemic-induced reduction in foot and road traffic. “Television’s declining reach makes out-of-home’s ubiquity even more valuable,” notes Zenith.

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