GroupM, Magna and Zenith offered upbeat advertising forecasts for audio heading into 2022, even though they expect the medium to take two years to recover from the losses of the 2020 ad recession. On a global level, audio posted a mid-20 percentage point decline last year, WPP-owned GroupM says, “before beginning a gradual, if incomplete, recovery that we think will be punctuated by elevated growth in 2022.”
Around the world, GroupM is calling for audio to grow 15.6% in 2021 and to jump 6.4% in 2022. “In subsequent years, we essentially assume a reversion to historical trends, which include a largely flat audio business,” says Brian Wieser, lead writer of GroupM’s “This Year Next Year” report.
GroupM’s forecast includes digital extensions of broadcast radio in its figures. “In the audio category, digital streaming services and podcasting-related revenues have become increasingly important parts of media plans and are critical to helping the industry avoid decline given its relatively unfavorable mix of smaller, locally constrained advertisers,” Wieser says. Group M expects audio to essentially be above 2019 levels in 2022, before reverting back to recent trends of mostly flat results.
IPG Mediabrands' Magna, meanwhile, says global radio sales rebounded by 16% in 2021 to $28 billion, achieving 89% of 2019 sales. In the U.S. market, cross-platform audio ad sales rose 25% to $16 billion on the strength of digital audio and podcasting, which shot up 68%. Magna’s forecast calls for U.S. audio ad sales to grow 6% to $17 billion in 2021, “thanks to the continued growth in podcasting, and the return to normal life which will cause an increase in commuting and terrestrial radio listening.”
And Zenith says radio will grow at an average annual growth rate of 1.4% between 2021 and 2024.
The audio breakouts are part of a trio of overall advertising forecasts issued Monday, with some saying the ad market is growing at its quickest rate ever. Calling for “much faster expansion than previously anticipated,” Group M expects total global ad revenues to grow 22.5% in 2021. That’s up from the 19.2% expansion it predicted in June. Faster than expected global growth is also in the cards for 2022, with a 9.7% increase anticipated, up from GroupM’s earlier forecast of +8.8%.
At a global level, TV, digital platforms, audio, newspapers and magazines, cinema and outdoor media will collectively account for $766 billion in ad revenue and should exceed $1 trillion in revenue during 2025, GroupM said. U.S. ad revenues are on track to grow in a range of 4-5% annually over the next five years.
Digital will out-perform the global ad market with revenues set to shoot up 30.5% and capture 64.4% of all advertising in 2021, up from 60.5% in 2020, per GroupM. Alphabet, Meta and Amazon will vacuum up 80-90% of the global digital total.
Although TV ad revenues are forecasted to grow by 11.7% in 2021, they’re coming off a 13.7% decline in 2020 and so are not expected to return to 2019 levels until 2023. GroupM has outdoor advertising rising 17.1% in 2021 and 14.9% in 2022, before returning to historical mid-single-digit growth trends in ensuing years.
Zenith estimates that global ad spend will reach $705 billion (USD) in 2021, up from $634 billion in 2019, before hitting $873 billion by 2024. “Over the next three years we expect the ad market to achieve its highest rate of sustained growth since 2000,” says Jonathan Barnard, Head of Forecasting at Zenith.
With progress to contain COVID-19 coming slower than expected, businesses have continued to pour more money into digital transformation, and that in turn has made digital advertising stronger in the second half of this year than previously expected. Zenith now estimates that digital advertising will grow by 25% year-on-year in 2021, compared to the 19% estimated in its July forecast. As the pandemic eases in 2022 and beyond, Zenith is calling for digital transformation to slow down – but not go into reverse.
Magna says global media advertising hit an all-time high of $710 billion in 2021, up 22% year-over-year, after a 2.5% decline in 2020. That’s an additional $126 billion on top of the 2020 tally. Put another way, the global ad marketplace is now 19% larger than pre-COVID levels and will continue to grow steadily in 2022, climbing 12%.
The U.S. ad market grew 25% to reach $284 billion, per Magna, with pureplay digital ad sales up 37% and traditional media up 8%. Spurred by economic growth and political spending, the U.S. ad market is on track to grow by 13% in 2022, with digital up 18% and traditional media increasing 4%. This will propel the U.S. ad market past the $300 billion mark for the first time, to reach a new all-time high of $320 billion.