Dentsu Revises Forecast, Ad Consensus Upgraded Dramatically

The ad industry's global and U.S. ad growth consensus improved dramatically for this year, as Dentsu became the third of the major agency holding companies to significantly upgrade its outlooks.

The consensus, an ongoing compilation of forecasts and revisions from the Big 4 forecasters -- Dentsu, WPP's GroupM, IPG Mediabrands' Magna, and Publicis Media's Zenith units -- improved to an 11.7% expansion in global ad spending vs. +10.6% when GroupM and Magna published their most recent updates in June.

The U.S. consensus for 2021 improved to an expansion of 12.2% from 9.7% in June.

The consensus is expected to further improve when Zenith issues its revised update shortly, but the trend is already clear that the ad marketplace has now fully recovered from the global and U.S. ad recessions of 2020 that were caused by shutdowns and ad category disruptions related to the COVID-19 pandemic.

"The pandemic-induced decline in global advertising spend during 2020 has proved less severe than anticipated. While 2020 remains the weakest performing year since the global financial crisis, the decline in growth during 2020 has improved since the January 2021 forecast from -8.8% to -7.2%," Dentsu writes in the introduction to its new forecast report.

While Tokyo-based ad conglomerate cautions that "all forecasts continue to be dependent on a number of factors and are subject to change," it nonetheless upgraded its worldwide, U.S. outlooks, as well as those for other national markets for both 2021, as well as 2022.

Dentsu's U.S. upgrade for this year was one of its most significant, boosting estimates for this year's U.S. ad expansion by nearly ten percentage points, from a growth rate of 3.8% forecasted in January to 13.7% currently.

"[U.S. ad spending] is forecast to rebound faster than previously predicted in 2021, growing 13.7% to reach $239.9 billion," Dentsu wrties, adding, "Digital spending accelerated throughout the pandemic, significantly in e-commerce, and will achieve a 44.8% share of spend in 2021. Many advertisers turned their 2020 buys to digital advertising, with Video and CTV/OTT (Connected TV / Over-TheTop) advertising soaring as consumers stayed at home. The increase in CTV and OTT spend will continue as supply erodes in linear TV, despite advertiser demand."

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