Signs of Better Days Ahead: GroupM Increases Ad Forecast

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NEW YORK—In a notable sign that the media business and the overall economy is quickly recovering from last-year’s pandemic-induced recession, the Business Intelligence unit of GroupM has revised its estimates for 2021 advertising upwards.

“We now expect a 22% growth in media ad revenue during 2021, a marked improvement from our prior forecast,” the company noted in its mid-year advertising report.   

Much of the growth will be captured by digital, which is expected to see a 33% bounce in 2021. But television advertising, excluding political advertising, will see healthy growth. 

“For 2021, we expect National TV—including connected TV advertising and linear forms of the medium—to grow by 8.7%, a full recovery from 2020’s 6.9% decline,” the company noted. “Looking beyond 2021, we expect flat trends, with incremental shifts out of television by large traditional brands offset by incremental spending by newer ones.”

Excluding political spending, the revised forecast predicts that total TV advertising will hit $63.1 billion in 2021, up 10.5% and that local TV ad spend will hit $19.8 billion, up 14.8%, while the national TV ad spend will hit $43.4 billion, a 8.7% bounce in 2021.

If political advertising is included, the total TV ad spend will be relatively flat in 2021 and local TV will be down 14.3% from 2020 levels. 

Much of the growth in core TV advertising excluding political reflects a recovery from a slump in TV advertising during the pandemic in 2020, when the TV ad spend without political advertising revenue dropped 10.4%. 

Nor is the rebound likely to reverse long-term declines in the sector. In 2022, GroupM expects total TV ad revenues, excluding political ad dollars, will drop by 2.3% and local TV to fall by 7.5%. 

In contrast, digital advertising will jump 33.9% in 2021 to $156.6 billion, excluding political. GroupM expects pure play internet ad revenues excluding political will increase another 18.6% in 2022. 

“In general, the large brands that dominate spending on the medium continue to rely heavily on television to support their brand-building efforts,” the report noted. “However, as viewing of ad-supported TV continues to decline, with growth in advertising inventory on streaming services not sufficient to offset this trend, pricing inevitably goes higher. With costs rising and reach diminishing, television inevitably loses some of its appeal.” 

One bright spot is connected TV advertising, which GroupM expects to hit about $18 billion in 2026 when it will account for over one third of all TV advertising. 

George Winslow

George Winslow is the senior content producer for TV Tech. He has written about the television, media and technology industries for nearly 30 years for such publications as Broadcasting & Cable, Multichannel News and TV Tech. Over the years, he has edited a number of magazines, including Multichannel News International and World Screen, and moderated panels at such major industry events as NAB and MIP TV. He has published two books and dozens of encyclopedia articles on such subjects as the media, New York City history and economics.