By Joe Mandese, Published by MediaPost
Madison Avenue’s consensus outlook for the U.S. ad economy improved dramatically this morning, as IPG Mediabrands’ Magna unit increased its forecast for 2021 ad growth to 23.2%, up from 15.1% in June, 6.4% in March and just 4.1% when it made its original prediction for the year in December 2020. Magna also upgraded its outlook for 2020, and now expects it to rise 11.6%, up from the 8.0% it was projecting in its June update.
Based on Magna’s upgrades, the consensus outlook for the ad industry’s Big 4 forecasting units — also including Dentsu, WPP’s GroupM and Publicis Media’s Zenith — now stands at growth rates of +16.6% for 2021 and +10.7% for 2022.
Importantly, much of the revised growth isn’t just due to easy comparisons with 2020’s ad recession and continuing uncertainty surrounding the COVID-19 pandemic, but is part of a genuine ad spending expansion, says Magna Executive Vice President-Global Market Intelligence Vincent Letang.
“The unprecedented growth in advertising spending in the first half (+32%) was more than low comps due to the COVID lockdown and recession last year,” he states, adding, “It was caused by a unique combination of national brands reconnecting with consumers and competing for a limited amount of traditional media inventory, while the lasting changes of COVID on lifestyles and marketing methods continue to fuel huge digital advertising spending from both big brands and small businesses. These ongoing organic growth engines, combined with Olympic budgets and the midterm election spending, will continue to generate double-digit spending growth in the second half and into 2022.”