Commentary

Recovery In Ad Spending Mostly Lifts Digital Sales

  • by August 24, 2021
Ad spending in major English-speaking markets jumped 52% from a year earlier in the second quarter, a study found. Publishers tended to feel the recovery in their digital businesses, though individual results varied.

The strong gains led to a 25% increase for the first half of the year, according to Standard Media Index data cited by Media Daily News. The study covered media spending in the United States, United Kingdom, Canada, Australia and New Zealand. The activity in these markets was compared with an exceptionally weak period last year, when advertisers slashed media spending during the onset of the pandemic.

The recovery in ad spending was seen in the recent earnings reports of publicly traded publishers, such as The New York Times Co., Meredith Corp. and Gannett Corp.
The NYT said its ad revenue surged by 66% from a year earlier to $112.8 million, driven by an almost 80% gain in digital advertising. Digital sales including direct-sold ads totaled $71 million to make up 63% of total ad revenue, up from 58% a year earlier. The news publishers also added to its digital subscriber base, which has become a key source of revenue.

Meredith, whose titles include Better Homes & Gardens, People and AllRecipes, experienced 31% growth in digital ad revenue to $491.8 million. Digital advertising was a bright spot amid a 20% slide in magazine ad revenue to $426.5 million. The total revenue for Meredith’s national media group slipped 1% to $2.02 billion.
Gannett, which publishes USA Today, reported the first quarterly profit since its 2019 merger. The news publisher saw an 18% increase in advertising and marketing services revenue to $420.1 million. With a 22% gain in its digital marketing solutions segment to $110 million, Gannett expanded its online business. Digital revenue of $259.3 million made up about one-third of total revenue.
The double-digit gains are going to be more difficult to achieve as the year progresses. When advertisers returned to the market last year, they piled into digital platforms to reach consumers stuck at home. There are signs that media buyers are shifting budgets back into other channels, including out of home, as people start commuting again.

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