By Jason Lynch, Published by AdWeek
Mid-term elections should help push next year’s haul past $300 billion, according to Magna
While the delta variant has disrupted plans for a return to normalcy this fall, it hasn’t hampered advertising bounce back. U.S. ad sales are now projected to increase 23% this year, to $278 billion, according to Magna’s latest quarterly forecast.
Already, advertising spending has jumped 32% in the year’s first half, to hit $130 billion. And Magna anticipates that U.S. spend will grow an additional 12% in 2022, hitting $300 billion for the first time ever, thanks to the mid-term elections and a return to normal business conditions across all categories.
Thanks to overall economic recovery following the pandemic’s onset last year, as well the Olympics in Tokyo spend and a rebound from categories hit hard during the pandemic, Magna has increased its annual projections from its last quarterly forecast in June, when it anticipated a 15% growth in ad sales this year to reach $259 billion.
The 32% increase in 2021’s first half “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,” said Vincent Letang, evp, global market intelligence, Magna, in a statement. “These ongoing organic growth engines, combined with Olympic budgets and the mid-term election spending, will continue to generate double-digit spending growth in the second half and into 2022.”
All of the top advertising categories increased ad spend in the first half, with automotive, finance, restaurants and retail up more than 50% over 2020 numbers. Magna estimates triple-digit growth for travel (up 8% in first half) and entertainment (32%) in the second half as Americans start traveling again and delayed blockbusters are released in theaters.
The automotive, travel, restaurants and personal care categories won’t return to their pre-Covid levels this year, but are expected to reach them in 2022.
Big gains for streaming platforms
Video media ad revenue was up 20% in the first half, reaching $35.7 billion. Broadcast and cable national ad sales grew 10% (to $19.5 billion), while local stations and local cable sales increased 13% (to $7.8 billion).
Streaming platforms saw big gains in the first half: connected TV, OTT and AVOD ad sales jumped 41% (to $2.6 billion) and digital video pure players like YouTube and Twitch increased 68%, to $5.8 billion.
Audio media, including traditional radio and podcasting, was up 29% (to $7.2 billion), while publishing was relatively flat, increasing just 0.8% (to $7.7 billion).
Digital pure players—which includes search, social, video, digital audio, banners and programmatic—saw a 49% first half increase, to $81.5 billion.