IPG intelligence arm Magna has upgraded its 2021 U.S. ad economy growth forecast for a fourth time given what it said was greater-than-expected ad spending in the first half and a strong outlook for the second half.
The firm now predicts that U.S. media owner ad revenues will grow 23% to reach $278 million this year. In June Magna forecast the U.S. ad economy would grow 15.1% in 2021 --- up from 6.4% in its March update, and up from just 4.1% when it issued its initial 2021 ad outlook in December 2020.
Magna also upgraded its 2022 forecast predicting an 11%-plus gain and crossing the $300 billion threshold for the first time.
First half 2021 growth was a robust 32% to $130 billion, per Magna’s analysis. All industry categories grew ad spending during the period, with auto, finance, restaurants, and retail all showing gains of 50% or more.
Revenues for traditional media owners grew 11% in the first half while pure-play digital platforms expanded 49%.
Magna reports that by the end of the year spending will reach 24% above pre-COVID levels with a “Covid Recovery Index” of 91 for traditional media and an index of 158 for digital.
Factors driving next year’s growth include what Magna called “return to normal business conditions for all verticals,” a strong macro-economic outlook and spending supporting the mid-term election cycle.