Zenith: Online Video To Lead 2021 Global Ad-Spend Growth, At +26%; Digital To Take 58% Share Of Total

Online video advertising will be the fastest-growing digital channel in 2021, rising 26% to $63 billion, projects Zenith’s just-released Advertising Expenditure Forecasts report.

“The online video landscape continues to transform, fueled by the growth of streaming services and connected TVs,” said Benoit Cacheux, Zenith global chief digital officer. “Its continued evolution requires a radical rethink of how to build the optimal screen-neutral reach model. The ingestion of new data sources into TV planning also creates further opportunities to further sync TV and video planning.”

The forecast calls for online video and performance-led ecommerce advertising to add $40 billion, or 11.2%, to global advertising spend, for a total of $669 billion.

That’s up more than 6% from the pre-pandemic peak.

The U.S. will be by far the largest contributor to global growth, accounting for 46% of the $67 billion added to the global ad market.

Ad-spend growth is expected to remain strong over the next two years, with 6.9% growth forecast for 2022 and 5.6% for 2023.

Digital advertising overall is projected to grow by 19% this year, and increase its share of total ad spend to 58% — up from 48% in 2019.

Much of the digital growth is new money from small businesses that turned to ecommerce to survive lockdowns, and from budget shifts from retail promotional display to display and search ads on retailer websites, notes Zenith.

Zenith expects e-commerce to slow but continue to pull in incremental revenue -- driving 13% growth in social media and 12% growth in search in 2022.

This year, social media growth is projected at 25%, to $137 billion, overtaking paid search for the first time. Paid search will expand by 19%, to $135 billion.

Social media and online video have eclipsed traditional static display, which is forecast to shrink by 15% this year, while online classified grows just 4%.

Television fell 8% globally in 2020 and is forecast to grow 1% in 2021.

However, U.S. TV ad spend is forecast to decline 4% this year, to $60.6 billion, from $63.4 billion in 2020, before rising to $63.2 billion in 2022 and remaining flat in 2023.

Nevertheless, thanks to limited inventory and higher demand driven by budget rebounds this year, the cost of TV advertising is up 5% on a global basis, on average, even as audiences shrink.

Digital media costs are being driven by growing audiences and more extensive monetization, with online video inflation averaging 7%, and social media roughly flat, compared to their respective 26% and 25% ad-spend growth rates.

Cinema and out-of-home were the worst affected by COVID-related restrictions, shrinking 72% and 28% respectively, but will see the fastest recovery in 2021, with respective growth rates of 116% and 16%.

Radio ad spend, which dropped 22% in 2020, is forecast to grow 4% this year. Print spend is forecast to decrease by 8%, marking its 14th consecutive year of declines.

Even by 2023, ad spend in in cinema, OOH, radio and print will still be below 2019 levels -- although cinema and OOH will have made up nearly all of 2020’s pandemic-driven losses.

All regions will see strong ad spend growth this year, led by North America, which is forecast to grow by 13% this year despite shrinking by only 1% last year. Growth in North America is being driven by the very rapid pace of digital transformation in its industries, as well as strong investment in connected TV and advertising-funded video-on-demand.

Next to the U.S., the largest contributors to global ad spend this year will be China, at 11%, and Japan and the U.K., with 6% each.

Growth in other regions will range from 9% in Asia Pacific to 15% in the Middle East and North Africa, which is recovering from the steepest decline in 2020 (-21%).


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