As the midyear approaches, GroupM is significantly boosting its outlook for audio revenue. The ad giant says it expects audio-based media ad revenue to grow 25% this year. That is an improvement over a 7.6% increase it forecast in March. GroupM credits easy comparisons to last year’s 27% decline and continued gains in podcast ad revenue. “Podcasting is also clearly growing rapidly and probably drawing incremental dollars from digital media,” it said, adding, “At a minimum, it provides the proverbial sizzle to audio’s steak and, along with the industry’s collective investment in streaming services, helps to sustain its perceived relevance.” It did not, however, release podcast-specific figures.
GroupM is also forecasting radio revenue will see “some incremental recovery” in 2022. It projects next year’s revenue will climb an additional 5.4%. That will help the audio industry get back to where it was prior to the pandemic, as its forecasts say even with this year’s anticipated double-digit growth rate the radio industry is still expected to be nearly nine percent below 2019 levels at year-end.
‘Far Exceeding Previous Expectations’
It is not just audio where GroupM is seeing a strengthening advertising market. The agency now expects 22% growth in overall media ad revenue during 2021. That compares to a 15% gain forecast in March and its earlier 12% forecast released in December.
“Advertising growth for the year is far exceeding previous expectations,” the agency said. “At the time of our last update, published in March, it was evident that the ad market was relatively strong during the first quarter and that it would further benefit from high inflation across the economy, lifting our expectations for growth. But we didn’t fully appreciate just how much the economy and advertising market were heating up.”
In total, GroupM estimates that total media company ad revenue will amount to $279 billion in 2021 and rise to $388 billion by 2026 leading it to state optimistically in its update, “welcome to the roaring twenties.”
Beyond just podcasting, GroupM says all digital advertising is racing forward. It projects digital advertising, excluding political, will grow by a third this year, building on last year’s 10% growth rate.
“Digital will account for 57% of all advertising we track in our data set for the United States,” it said. “We also expect that, by 2026, digital advertising will continue to drive—and outpace—the overall market, accounting for 69% of the industry.”
GroupM says with every passing year, the distinctions between digital and non-digital media become increasingly blurry, and it expects to modify its definitions noting that it still lumps together streaming audio and broadcast radio.
The only potential risk to its numbers, says GroupM, would be a cancellation of the Tokyo Summer Olympics. But even if that were to happen, it believes the hundreds of millions of dollars that marketers have earmarked for the games would still be spent during the third quarter.
“Advertising budgets may be barely impacted if the most affected marketers focus their spending on longer-term brand building or limit their use of scarce parts to their highest-value products,” it says.