GroupM Nearly Doubles 2021 U.S. Ad Growth Projection, Revises 2020 Decline To Less Than A Point

The outlook for U.S. ad spending has improved considerably for this year, as have estimates for 2020, which included a recession attributed to the COVID-19 pandemic, according to a mid-year update released this morning by GroupM's Business Intelligence unit.

GroupM now projects U.S. ad spending will expand 16.5% -- 22.3% if the incremental impact of 2020 political ad spending is removed -- a marked improvement from estimates it released in its last update in March (+9.1% and + 14.9%, respectively for total U.S. ad growth and excluding political ad spending).

GroupM's update brings Madison Avenue's Big 4 ad forecaster consensus growth projection for 2021 to +7.5% from +5.1% in March, with others expected to release upward revisions in the next few weeks.

GroupM's update also reduces the severity of the 2020 ad recession, which according to the WPP unit is now estimated to have declined less than a percentage point (-0.8%), vs. a 2.0% decline estimated in March and a 3.9% decline projected in its original December 2020 outlook for 2021.

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That revises the current Madison Avenue consensus for 2020 to -3.3%, with other adjustments expected to come.

Meanwhile, GroupM is projecting more sustained growth for the next several years, with 2022 U.S. ad spending now projected to rise 12.4%.

"As we approach the midpoint of 2021, advertising growth for the year is far exceeding our previous expectations, leading us to revise our forecasts for this year and beyond," GroupM's Business Intelligence team writes in the just-released June 2020 edition of its mid-year forecast.

"It was evident that the ad market was relatively strong during the first quarter and that it would further benefit from high inflation across the economy, lifting our expectations for growth," the report continues explaining the upward adjustment, "But we didn’t fully appreciate just how much the economy and advertising market were heating up. It was only after we saw results for the quarter from the likes of Google, Facebook and Amazon (and Snap, Pinterest and others) that we could appreciate just how strong the market was, especially for digital media."

4 comments about "GroupM Nearly Doubles 2021 U.S. Ad Growth Projection, Revises 2020 Decline To Less Than A Point".
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  1. Ed Papazian from Media Dynamics Inc, June 10, 2021 at 12:32 p.m.

    Joe, I assume that the other predictions didn't factor out the political spend effect as Group M did. Otherwise why are they so wildly different this time around?

  2. Joe Mandese from MediaPost, June 10, 2021 at 12:37 p.m.

    @Ed Papazian: GroupM reports it both ways. The ones in the consensus table are all total ad growth estimates, including political.

  3. Ed Papazian from Media Dynamics Inc, June 10, 2021 at 12:59 p.m.

    Thanks, Joe. That makes me wonder even more about why the large disparities?

  4. Joe Mandese from MediaPost, June 10, 2021 at 1:19 p.m.

    @Ed Papazian: Well, a couple of things.

    1) They're not necessarily defining total ad spending exactly the same way, so the bases are slightly different.

    2) Look at the footnote in the table to see when each forecast was rendered, then look at the table at the bottom showing GroupM's own revisions from December 2020 to March 2021 to June 2021.

    As we noted in the story, expect to see others update their original forecasts in the weeks to come. And I would expect they will be significantly higher, too.

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