Published by Campaign Asia
A year of crackdowns and mixed economic fortunes in APAC makes the region the lowest performer globally in 2021, as powerhouse China’s growth rate falters.
The advertising sector has rebounded stronger than expected in 2021, with global adcspend growing by almost 22% to reach US$710 billion—representing the highest growth rate ever recorded by Magna.
This far surpasses the 14% growth rate forecasted by Magna in June 2021, and demonstrates a significant turnaround from the 2.5% ad decline witnessed in 2020. Growth has exceeded mere recovery, according to Magna’s December 2021 global advertising forecast, with the 9% compounded advertising market growth over 2020-2021 higher than the 6% average growth experienced during the four years before Covid. The global marketplace is now 19% larger than pre-Covid levels, Magna said.
This acceleration has been driven by digital advertising formats (search, social, video, banners, digital audio), which grew by 31% to reach $442 billion in 2021, or 146% of the pre-Covid market size. Digital ad formats now account for 62% of total advertising sales worldwide. All digital ad formats grew by double-digits in 2021, led by digital video formats (37%), social media (34%) and search (33%).
By comparison, linear ad format sales (TV and long-form video, radio, print, OOH, cinema) grew by 9% to reach $268 billion worldwide, equivalent to 90% of pre-Covid levels. Magna predicts growth will slow to 12% in 2022 to reach $795 billion. Linear ad format growth will moderate to 4% while digital ad formats will grow by 17% and reach 65% of total ad sales, the firm predicts.
APAC posts smallest recovery Markets which rolled out swift and widespread vaccination programmes and allowed businesses to reopen in early 2021 witnessed the strongest year-on-year ad spend growth, led by the UK, Canada and the US at 34%, 27% and 25%, respectively. Brazil (up 30%) led strong growth in the LATAM region of 26% year-on-year, which Magna said is partly driven by economic inflation.
Asia-Pacific was the worst-performing region, with 16.5% ad spend growth in 2021, compared to 23% in EMEA and 25% in North America. Magna attributes this to mixed fortunes for economic recovery and vaccine rollouts in the region.
Australia (23.1%) and Hong Kong (24%) witnessed the strongest growth among the region’s markets. The former’s performance comes despite it plunging major cities into extended periods of lockdown from June.
The latter market has been operating largely as normal for months thanks to tight control over incoming travelers. Those markets were followed by Malaysia (18.2%), New Zealand (18%), Taiwan (17.9%), South Korea (18.9%) and Indonesia (16.6%). Despite keeping its Covid cases almost at zero throughout the year, China’s growth in 2021 has been slower than most APAC markets at 16.7%.
Magna attributes the government’s crackdown on digital media owners, which has crimped overall advertising revenue growth in digital formats, as one of the reasons for the slower growth rate. Japan, which hosted a troubled Tokyo Olympics in July, is expected to post 15% ad revenue growth in 2021.
Several markets in APAC have experienced their worst outbreaks in 2021, resulting in lower advertising recovery rates. This includes the Philippines, expected to post 15.2% adspend growth in 2021, Singapore (14.4%) India (14%), Sri Lanka (13%) Thailand (5.7%) and Vietnam (3.7%). As with other regions, growth in the region was powered by digital advertising, with revenues increasing by 23% in 2021.
Growth primarily came from mobile advertising campaigns (up 28% to nearly 80% of total digital budgets). By format, 2021’s growth came from search (up 23%), video (30%), and social (27%).
By comparison, linear ad spending grew by 6.5% in 2021 in APAC. In 2022, APAC advertising revenues are forecast to increase by 11.2% to $235 billion, 25% above the pre-Covid spending level.
This will be driven by 16.2% digital advertising growth, Magna said. By 2026, mobile advertising spending in APAC is predicted to represent 88% of total digital budgets.
