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GroupM: Ad-Spending Growth Is Fastest In Postwar Era.

The one-two punch of economic stability and Americans getting out and about again is super-charging ad-spending, with the current growth rate likely to be the fastest in the postwar era, GroupM says. The increase follows a year when many companies cut back on advertising in the early months of the pandemic.

“We are seeing ad surges pretty much across the board as things get back to normal. Some of the categories that were most impacted are starting to pick up again, like travel,” Dani Benowitz, President of U.S. for Magna Global told the Wall Street Journal.

It’s not just traditional advertising outlets like radio and TV that are benefitting from the surge in ad-spending. Major players in digital advertising are the recipients of a growing share of ad dollars. Marketers are shifting money toward digital because they feel they offer a better ROI. Anheuser-Busch found that consumers are spending more time on digital media. That, coupled with a smaller audience size for traditional TV, has led the adult beverage company to move money to digital, which also allows it to be “more flexible and efficient,” U.S. Marketing Chief Marcel Marcondes told the Journal.

GroupM expects digital-advertising platforms to capture 51% of all ad dollars in the U.S. this year, up from 44% in 2019. This estimate is likely to be adjusted upward after better-than-expected Q1 results from Alphabet, parent company of Google, which says first-quarter revenues surged 34% to $55.31 billion.

GroupM, which has been tracking ad spending since 2000, expects U.S. ad spending to grow by 15% this year to $250.7 billion, excluding political ad dollars. Agencies will benefit as businesses spend on advertising and build brand awareness as the economy improves, analyst Michael Nathanson said.

Anheuser-Busch, which cut ad-spending by a double-digit percentage in 2020, is expected to return to pre-pandemic spending levels this year. “The recovery and vaccination rates have accelerated faster than we thought,” Marcondes said. The reopening of business and return of events “coincides with summertime, which is a big season for us,” he continued.

Another company that cut ad-spending last year, Massachusetts Mutual Life Insurance, also plans to return to pre-pandemic spending levels. “We saw consumer confidence coming back and we are also seeing high demand for life insurance and financial services right now,” Head of Marketing Jennifer Halloran said in a release.

The economic return also coincides with an eagerness to travel again. Expedia recently kicked-off a new branding campaign, which it says would be its largest brand-marketing campaign in five years. “We are starting to advertise now for people who are feeling comfortable traveling this summer and even for the fall,” Senior VP/GM Shiv Singh said.

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